Number of Employees at Head Office:
A corporation's risk profile attempts to determine how a willingness to take risk or aversion to risk will affect an overall decision-making strategy.
Individual Risk Profile The risk profile for an individual should determine that person's willingness and ability to take on risk. Risk in this sense refers to portfolio risk. This risk can be thought of as the trade-off between risk and returnwhich is to say the tradeoff between earning a higher return or having a lower chance of losing money in a portfolio.
Willingness to take on risk refers to an individual's risk aversion. If an individual expresses a strong desire not to see the value of the account decline, and is willing to forgo potential capital appreciation to achieve this, this person would have a low willingness to take on risk, and is risk averse.
Conversely, if an individual expresses a desire for the highest possible return, and is willing to endure large swings in the value of the account to achieve it, this person would have a high willingness to take risk, and is a risk seeker.
Ability to take risk is evaluated through a review of an individual's assets and liabilities. An individual with many assets and few liabilities has a high ability to take risk.
Conversely, an individual with few assets and high liabilities has a low ability to take risk. For example, an individual with a well-funded retirement account, sufficient emergency savings and insurance coverage, and additional savings and investments, with no mortgage or personal loans likely has a high ability to take risk.
Willingness and ability to take risk may not always match up. For example, the individual in the example above with high assets and low liabilities may have a high ability to take risk, but may also be conservative by nature and express a low willingness to take risk. In this case, willingness and ability to take risk differ, and will affect the ultimate portfolio construction process.
The Impact of an Individual's Risk Profile Risk profiles can be created in a number of ways, but generally begin with a risk profile questionnaire. All risk profile questionnaires score an individual's answers to various probing questions to come up with a risk profile, which is later used by used by financial advisorsboth human and virtual, to help shape an individual's portfolio asset allocation.
This asset allocation will directly affect the risk in the portfolio, so it is important that it aligns well with the individual's risk profile. Organizational Risk Profile A risk profile also illustrates the risks and threats faced by an organization.
It may include the probability of resulting negative effects, and an outline of the potential costs and level of disruption for each risk. It is in a corporation's best interest to be proactive when it comes to its risk management systems.
Some risks can be minimized if they are properly accounted for. Corporations often create a compliance division to help in such endeavors. Compliance helps ensure that the corporation and its employees are following regulatory and ethical processes.
Many companies hire independent auditors to help discover any risks, so they can be properly addressed before they become external issues. Failing to minimize risk can lead to a negative consequence.
For example, if a drug company does not properly test its new treatment through the proper channels, it may harm the public and lead to legal and monetary damages.
Failing to minimize risk could also leave the company exposed to a falling stock price, lower revenues, a negative public image and potential bankruptcy.each consumer group, construct what is called a demographic profile: Age Gender Location Income level Social class/occupation Education Other (specific to your industry) Other (specific to your industry) Business Plan for Startup Business.
Jun 14, · Let’s look at some of the company profile examples to understand how to develop the right kind of profile for your business.
Company Profile Examples. Advanced Excel Training (42,+ students) Coding for Entrepreneurs (+ students)Author: Richa.
Sample Export Market Plan I. Executive Summary II. Company Profile The ABC Co. started in as two small shops in Maintown, one for wood products who has a degree in commerce from Bigcity University and 13 years business experience, and Mr.
John Doe, Plant General Manager, who holds a . The Detailed Plot Outline. IF you own more than six colors of post-it leslutinsduphoenix.com one’s for you.
From the highest roman numerals to the lowest alphanumeric characters you can outline every last inch of your novel scene by scene, page by page, line by line. Emphasis is the UK’s leading business- writing training company, offering specialist business-writing training and consultancy services to private and public sector organisations all over the world.
a basis for credit, marketing and other business decisions. In accepting this report you hereby agree to be responsible for all damages arising from a violation or breach of the above conditions. It is understood that this report is based upon information obtained from sources deemed reliable, the accuracy of which is no manner guaranteed by DP Info.