“Corporate treasurers are usually concerned about risk, and often have a mandate from their companies to measure and mitigate it. The importance of this mandate is evidenced by the amount of material published every month, encouraging treasurers to adopt different approaches and use different instruments.
The main problem with risk mitigation is that there are many different kinds of risk. Any attempt to remove all risks is likely to be prohibitively expensive, and so it is useful to look in detail at how to classify and view these risks. At a basic level, there are two different measures of any risk.”
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