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PEMBELANJAAN PEMBELANJAAN PERUSAHAANPERUSAHAAN
PEMBELANJAAN PEMBELANJAAN PERUSAHAANPERUSAHAAN
LECTURE 9 – RISK LECTURE 9 – RISK MANAGEMENTMANAGEMENT
PP/MB-IPB/10 22
General:General: Uncertainty associated with a future outcome Uncertainty associated with a future outcome
or eventor event
Corporate activities:Corporate activities:
The expected variance in profits, losses, or The expected variance in profits, losses, or cash flows arising from uncertain eventcash flows arising from uncertain event
RISKRISK
PP/MB-IPB/10 33
Operating Risk:Operating Risk: The risk of loss arising from the daily The risk of loss arising from the daily
physical (non-financial) operating activities physical (non-financial) operating activities of a firmof a firm
Financial Risk:Financial Risk: The risk of loss arising from the financial The risk of loss arising from the financial
activities of a firmactivities of a firm
RISK CLASSIFICATIONRISK CLASSIFICATION
PP/MB-IPB/10 44
GENERIC RISK GENERIC RISK MANAGEMENT PROCESSMANAGEMENT PROCESS
RiskIdentification
RiskMonitoring
RiskManagement
RiskQuantification
Define and identify all sources of
risk: actual, anticipated,
and perceived
Estimate the financial
impact on the firm of all pure and
speculative risks
identified
Decide how to manage pure
and speculative risks (through loss control,
loss financing or risk
reduction)
Track and assess the
performance of the risk
management strategy in
light of actual
experience
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