Financial risk management

Financial risk management is the practice of managing investments and other activities (like getting a loan) to try to avoid the risk of not getting back your money or the other advantages you’d hoped for. It’s like a shield to help you avoid losses. To do this, you analyze the potential risks you face, such as changes in the market, the possibility of default on loans, and changes in interest rates. You also set limits on how much money you can lose in a given situation, and you make sure you follow those limits. Finally, you keep track of how well you’re doing and take action if things aren’t going as expected. This way, you can make sure that you’re not getting into too much trouble and losing all your money.