Risk, is the uncertainty between the purpose of production and the results of labor, broadly speaking, there are two meanings: one definition emphasizes the risk manifested in the uncertainty of the benefits;
Another definition emphasizes the risk manifested in the uncertainty of the cost or the price, if the risk is manifested in the uncertainty of the benefits or the price, it means that the risk produces a result that may bring about a loss, a gain, or neither a loss nor a gain, belongs to the broad sense of risk, the owner's exercise of ownership activities should be regarded as management risk. If the risk is expressed as a benefit or a cost, it means that the outcome of the risk may result in a loss, a profit or no loss or no profit, which is a broad risk, and the activity of the owner in exercising his ownership rights should be regarded as a managerial risk, and the financial risk is in this category.
And the risk manifests itself in the uncertainty of loss, which means that the risk can only manifest loss, there is no possibility of profit from the risk, belonging to the narrow sense of risk. Risk and return are directly proportional to each other, so generally aggressive investors favor high risk in order to obtain higher profits, while prudent investors focus on safety considerations.
Risk classification:
I. According to the nature
1. Pure risk: Pure risk refers to the risk that there is only a chance of loss without the possibility of profit. For example, homeowners face the risk of fire, car owners face the risk of collision, etc., when the fire and collision accidents, they will suffer a loss of economic benefits.
2, speculative risk: speculative risk is relative to pure risk, refers to both the opportunity for loss and the possibility of profit risk. The consequences of speculative risk are generally three kinds: one is no loss; two is a loss; three is a profit. For example, buying and selling stocks in the stock market, there are three consequences of making money, losing money, and not losing money, and thus belong to speculative risk.
Two, according to the subject
1, property risk: property risk is the risk of damage, loss or depreciation of all tangible property and the risk of economic or monetary loss. Such as plant, machinery and equipment, finished products, furniture, etc. will be subject to the risk of fire, earthquake, explosion, etc.; ship in navigation, may be subject to the risk of sinking, collision, grounding, etc..
Property loss usually includes both direct and indirect loss of property.
2, personal risk: personal risk refers to the risk of disability, death, loss of labor capacity and increased medical expenses. Such as people will be born, old age, disease, death and other physiological laws and natural, political, military and other reasons and early death, disability, loss of working ability or old age without dependence.
There are generally two types of losses due to personal risk: one is the loss of earning capacity; the other is the loss of additional costs.
3, liability risk: liability risk refers to the individual or group of negligence or negligent behavior, resulting in other people's property damage or personal injury or death, in accordance with the law, the contract or the moral obligation of the risk of civil liability.
4, credit risk: credit risk refers to the economic interaction between the right and the obligor, due to one party's breach of contract or violation of the law, resulting in the other party to suffer economic loss risk. Such as import and export trade, the exporter (or importer) will be due to the importer (or exporter) does not fulfill the economic losses suffered.
Three, according to the behavior
1, specific risk: the risk of causal relationship with a particular person, that is, caused by a particular person, and the loss only involves the risk of a particular individual. Such as fire, explosion, theft, and legal liability for property damage or personal injury to others are such.
2, the basic risk: the risk of damage to society. The cause and effect of the basic risk is not related to a particular person, at least the risk of individuals can not be prevented. Risks related to social or political, and risks related to natural disasters are basic risks. For example, earthquakes, floods, tsunamis, and economic downturns fall into this category.
Four, according to the environment
1, static risk: static risk is the normal socio-economic situation, by the irregular changes in the forces of nature or people's negligent behavior caused by the risk of loss or damage. Such as lightning, earthquakes, frost, storms and other natural causes of loss or damage; fire, explosion, accidental injury caused by loss or damage.
2, dynamic risk: dynamic risk is the risk of loss or damage due to socio-economic, political, technological and organizational changes. Such as population growth, capital increases, improvements in production technology, changes in consumer preferences.
V. According to the causes
1, natural risk: natural risk is the risk of irregular changes in natural forces that threaten social production and social life. Such as earthquakes, winds, fires, and various plagues and other natural phenomena are frequent and large number of occurrences. Among the various types of risks, natural risks are the ones that insurers underwrite the most.
Natural risks are characterized by:
(1) the uncontrollability of the formation of natural risks
(2) the periodicity of the formation of natural risks
(3) the ****diplomatic nature of the consequences caused by natural risk accidents, i.e., natural risk accidents, once they occur, are often very wide-ranging in terms of the objects they involve.
2, social risk: social risk is due to the behavior of individuals or groups (including negligent behavior, misconduct and intentional behavior) or inaction so that social production and people's lives suffered loss of risk. Such as theft, robbery, negligence and vandalism and other acts will likely cause damage to other people's property or personal injury.
3, political risk (country risk): political risk refers to the process of foreign investment and trade, due to political reasons or reasons beyond the control of both parties; so that creditors may be subject to the risk of loss. Such as war in the importing country, civil unrest and suspension of imports of goods; because the importing country to implement import or foreign exchange controls and so on.
4, economic risk: economic risk refers to the production and sales and other business activities due to a variety of market supply and demand, economic and trade conditions and other factors change the impact or the operator's decision-making errors, deviation from the prospect of expectations and other risks that lead to business failure. For example, the increase or decrease in the scale of production, price increases or decreases and the profit and loss of the operation.
5, technology risk: technology risk refers to the development of science and technology along with changes in the mode of production and the risk of threatening people's production and life. Such as nuclear radiation, air pollution and noise.
Expanded Information:
Risk Reduction Ways:
1. Diversification of Choices
Diversification refers to the diversification of actions that consumers can take to reduce risk when planning an economic activity that carries risk in a future period.
2. Risk Diversification
Investors eliminate risk by investing in many projects or holding shares in many companies. This way of holding assets in many forms avoids to some extent the risk that occurs by holding a single asset, so that the investor's return on investment is more certain.
3. Risk Transfer (Insurance)
In situations where consumers are exposed to risk, risk-averse individuals will be willing to give up a portion of their income to purchase insurance. If the price of insurance is exactly equal to the expected loss, risk-averse individuals will purchase enough insurance to be fully compensated from any loss they may suffer, certain that the income gives them more utility than the utility that comes from the existence of the precarious situation of high income when there is no loss and low income when there is a loss.
In addition, consumers can self-insure by adopting a diversified portfolio of assets, such as purchasing *** with a mutual fund; and by depositing money into certain funds to offset future losses or lower incomes.
Baidu Encyclopedia - Risk