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We can avoid or control financial risks or threats with the help of risk management. Financial risk management is actually referred to projecting and forecasting of financial risks all together with the identification of procedures to eliminate or reduce the impact of financial risks. These threats or risks could occur from an extensive multiplicity of sources, considering legal liabilities, planned management faults, accidents, natural calamities or financial ambiguity.
So, to decrease and control the coverage of investment to such risks, fund managers and investors exercise risk management. We should give preference to risk management at the time of making investment decisions. If we will not follow the same then it might cause tragedy on investment in times of financial disorder in an economy.
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