Statistics and Risk
Management
Risk Management Strategies
Video URL:
jukebox.esc13.net/untdeveloper/Videos/Risk%20Management%20Strategies.
mov
Vocabulary List:
Risk: the uncertainty of receiving a return on an investment.
Credit Risk: the uncertainty that a borrower will pay a debt.
Market Risk: the uncertainty that the value of an investment portfolio will
increase or decrease.
External Context: the environment in which an organization operates, such
as market conditions and trends, industry, culture, threats, and opportunities,
etc.
Financial Management: analysis and development of effective practices and
strategies to maximize positive fiscal conditions of an organization.
SWOT Analysis: a method of analyzing strengths, weaknesses,
opportunities, and threats to an organization.
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Resources:
Managing Risk
This article by Dr. Geoff Benson of North Carolina State University
breaks down risk management from an agricultural perspective. The
article provides an in-depth look at sources of risk, setting risk
management priorities, risk management strategies, implementing
strategies, and controlling risk using agricultural based examples that
can be applied to other business industries.
http://www.agecon.ncsu.edu/VIRTUAL_LIBRARY/ECONOMIST/septoctec99.pdf
Business Risks
Managing Risk, Crisis Management and Business Continuity Planning,
IT Risk Management, and Assess and Minimize Your IT Risks.
http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1079050214
Identifying Strategies and Tactics for Reducing Risks
This article on risk management will help students answer the following
questions. What is risk reduction? What are protective factors? What is
the difference between strategies and tactics? Who should be involved in
selection of risk reduction strategies? The article also provides
information on how to select risk reduction strategies.
http://ctb.ku.edu/en/tablecontents/sub_section_main_1161.aspx
Risky Business – Or Not!
This online activity allows students to learn about the risks in company
stocks and other risk factors within a company. The activity is completely
laid out with all needed materials listed and will take approximately three
class periods to complete.
http://www.thirteen.org/finance/educators/lesson4.html
Copyright © Texas Education Agency, 2012. All rights reserved.
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Risk Management Strategies Practice Test
Name:_____________________
TRUE/FALSE:
_____1. Basically risk management helps the business make the right moves in order to protect itself
against bad things happening.
_____2. Not every business should be concerned with risk.
_____3. A company should identify their weaknesses in order to understand their risks.
MATCHING:
a. External Context
b. Operative Management
c. Financial Management
_____4 Risks include non-compliance with contractual requirements, loss of market share, loss of skills,
physical damage to personnel, environmental pollution
_____5. Risks include difficulty in collecting accounts receivable, unfavorable changes in exchange rates,
imbalances in liquidity
_____6. Risks include emergence of unfavorable laws and/or regulations, negative changes to market
conditions, technological innovations that favor competitors
_____7. Which of the following would NOT be a weakness of a company?
a. Cash Flow Issues
b. Over Budgeted Expenses
c. Strong Management Team
d. Work Force shortages
e. Intense Competition
8. List one reason that a company might lose money:
9.__________ is a risk management tool that exchanges the uncertainty of a possible large financial loss
for a smaller payment. (What do you pay for to keep your car protected?)
_____10. Which would be the best risk management tool to protect against theft of clothing in your store?
a. Theft protection equipment
b. Insurance policy
Copyright © Texas Education Agency, 2012. All rights reserved.
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Risk Management Strategies Practice Test KEY
1. T
2. F
3. T
4. B
5. C
6. A
7. C
8. Revenue falls short, expenses increase, a judgment, fine, or
penalty imposed on the business, security breach
9. Insurance
10.
Theft protection equipment
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Student Assignment
12.1a Risk Management Fundamentals
Name:_____________________
According to King James the 1st in (1566-1625) “Smoking is
hateful to the nose, harmful to the brain, and dangerous to the
lungs.”
How has the Cigarette industry mitigated risk to their core
business of manufacturing and selling cigarettes? Find
examples and explain.
Key word search: cigarette company research, cigarette
company ethics, cigarette company marketing, cigarette
company politics
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Student Assignment
12.2a Risk Management Techniques
Name:_____________________
You have decided when you graduate you want to see the world
and have decided to travel across the globe. You parent have
agreed to match your savings up to $5000.00 to fund the trip.
What risks can you identify that will you encounter on your trip?
What precautions can you take to mitigate these risks?
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Explore Activity:
Extension 12.1a – In Assignment 12.1a you investigated how the cigarette
industry has dealt with risk in the light of a long history of adverse publicity
about the dangerous nature of their product. By the later part of the 20th
century tobacco companies have been severely limited in how they can
advertise and have seen “sin” taxes on their products greatly increased.
Another industry subject to controversy is the alcohol manufacturing
industry (beer, wine, and distilled spirits). What issues has this industry had
to face similar to the tobacco industry? What are the differences? Look into
some of the marketing strategies and moral and ethical issues the alcohol
industry faces and prepare a 1-2 page paper of your findings.
Extension 12.2a – In Assignment 12.2a you considered potential sources
of risk you might encounter in a world tour after you graduate. Now you are
going to make a travel itinerary. Write a detailed travel plan that includes
(but is not limited to) the following:
destinations
methods of travel
food and housing
miscellaneous expenses
Keep in mind that you have up to $5000 of matching funds from your
parents. The amount of money you are able to save is uncertain, so you
should include options in your plan to allow for different total amounts of
funds:
You are able to save $2500.
You are able to save $5000.
You are able to save $10,000.
Be sure to include descriptions of the risks you anticipate and how you
might minimize those risks, and how those risks might differ because of the
total amount of money you have available.
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