Tashkent institute of finance department «state finance» presentation on the discipline “Finance” on the Theme

4. Risk transfer

• Risk transfer is the transfer of risk to others. Selling risky securities to someone else and acquiring an insurance policy are examples of such a risk management strategy.
• Another example: you do not take any action to avoid the risk, and expect that the damage will be covered at someone else's expense.
• Risk transfer is carried out using three main methods: hedging, insurance and diversification.

Theme 2.17. «Finance and risks»

Hedging, insurance and diversification

Copyright © 2020 Ye. А. Akhunova

Hedging

• Hedging of risk is said in those cases when the action taken to reduce the risk of incurring losses simultaneously leads to the inability to receive income.

Insurance

• Insurance involves the payment of a premium or premium (the price you pay for insurance) in order to avoid losses.
• By purchasing an insurance policy, you agree to go to the guaranteed costs (the insurance premium paid for the policy) in return for the probability of incurring much greater damage associated with the lack of insurance.

Diversification

• Diversification is expressed in the possession of many risky assets, instead of concentrating all investments in only one of them. Therefore, diversification limits your exposure to the risk associated with one single type of asset

Theme 2.17. «Finance and risks»

List of references

Copyright © 2020 Ye. А. Akhunova

Main sources:

1. Foundations of finance : the logic and practice of financial management / Arthur J. Keown, John D. Martin, J. William Petty. — 8th ed. p. cm. — (The Pearson series in finance). – Pearson, 2014.

2. Financial economics / Zvi Bodie, Robert C. Merton, David L. Cleeton. – 2nd. ed. p. cm. — (The Pearson series in finance). – Pearson, 2009.

3. Fabozzi, Frank J. Pamela Peterson Drake. The basics of finance: an introduction to financial markets, business finance, and portfolio management. John Wiley & Sons, Inc., Hoboken, New Jersey, 2010.

Additional sources:

4. Eddie McLaney. Business finance. - 8nd. ed. p. cm. — (The Pearson series in finance). – Pearson, 2009.

5. Ronald W. Melicher. Edgar A. Norton. Introduction to Finance: Markets, Investments, and Financial Management, 16th Edition, Wiley, 2017.

Internet-sites:

6.www.scopus.com (Multidisciplinary bibliographic and abstract database of Scopus publications).

7.www.webofscience.com (Polythematic abstract-bibliographic and scientometric (bibliometric) database of Web of Science).

8.https://www.sciencedirect.com (Electronic collection of scientific, technical and medical full-text and bibliographic information ScienceDirect).

Theme 2.17. «Finance and risks»

Copyright © 2020 Ye. А. Akhunova

THANK YOU VERY MUCH

FOR YOUR ATTENTION!

• For comments, questions and requests:
• E-mail: [e-mail]
• Telegram: @yelena_akhunova