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Market risk and risk reduction
The total market risk a business faces is linked to its value chain and a consequence of the chosen strategy. Market risk is managed mainly through the strategic choices the business makes. Only through strategic risk taking will value be created. Therefore it is not desirable to remove all risk. What risks should be mitigated…
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What risk can and should be mitigated?
After having calculated its risk tolerance the business may come to the conclusion that the overall risk is more than the business can carry. In that case it might be necessary to mitigate some of the risk inherent in the business. But not all risk can or should be mitigated. The macro risk the business…