Dealing with the financial risk

This work focuses on the concepts of business organization, risk and their relevance in business management. After a presentation of all these topics, a critical analysis will be proposed in order to depict the linkages among them and to stress the elements affecting managerial choices and the relationships taking place in business contexts. Also, a deep analysis of financial risk management will be proposed. A financial risk is something like an uncertainty of expected financial payment from one party to another. It can be better explained in banking services scenario. Suppose that a firm or a person takes a loan from a bank and expects to pay back EMI (Equated Monthly Installment) from the subsequent month: the possibility they fail to repay will be a financial risk to the bank. Similarly, if a bank receives a deposit from a person, the possibility to fail paying the money with interest on maturity date is another type of financial risk that bank should be able to handle.

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