If managers could have just one wish, many would ask for a crystal ball. With this tool, there would never be any worry about risk. The manager could look into the crystal ball and know exactly what will happen with each decision. Unfortunately, we do not have this luxury and must use other tools and techniques to determine the risks we face for the decisions we make. Understanding the types of financial risks will be the focus of this week’s discussion question.
For this discussion question, you will prepare a 3–5 slide narrated PowerPoint presentation that addresses different types of financial risk. You will also discuss the implications for decision-making in healthcare organizations.
Use these questions to guide your development of the presentation:
- What is risk?
- What is financial risk as it relates to required return?
- What is stand-alone, corporate, and market risk?
- What is the relevance of risk measures in the financial decision-making process?