What is the difference between a financial risk assessment and a financial risk management

What is the difference between a financial risk and a business risk Introduction: The Ubiquity of Risk Hello everyone, and welcome to today's video. In the dynamic world of finance and business, risk is an ever-present factor. Whether it's a multinational corporation or a small-scale startup, every entity faces various risks. However, it's crucial to differentiate between financial risk and business risk. While these terms might seem similar, they have distinct characteristics and implications. Today, we'll delve into the nuances of these two concepts, shedding light on their significance in the corporate landscape. Defining Financial Risk Let's start by understanding financial risk. In essence, financial risk refers to the potential for financial loss or instability. It encompasses the uncertainty associated with investments, debts, interest rates, and market fluctuations. For instance, a company that heavily relies on loans to finance its operations is exposed to financial risk. If interest rates suddenly rise, the company's financial stability could be compromised. Similarly, investments in volatile markets carry inherent financial risks. To mitigate financial risk, entities often employ strategies such as diversification, hedging, and risk assessment.