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Risk Taking In Economical Ï¿½ Financial Activity

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  • Cristiana Luminita Bogdanoiu

Abstract

Any economic activity is carry on in risks conditions, these risks being more and less serious, more and less well- known, easiest and hardest to avoid. Before starting any tipe of activity it�s enforce an identification and evaluation of risks who can appear, their elimination and reduction as much as it can, accepting just these risks who affect in small mesure the firm activity. The insufficient knowledge of risk, it wrong evaluation, the missing of an adecvated protection against this, will affect directly the final result of carry on activity. In economical-financial activity, risk is a component of any activity, being found in daily agenda of companies� managers. In any moment the managers have to know which is and how is the risk, and if this risk it isn�t bigger than profit. The unexpected modifications in evolution of interest rate, of exchange risk or of price of one product not only affect the financial results of one firm, but it can determine even her failure. As a matter of fact, the financial decisions imply incertitude. The financial decisions are taken in consideration by the cashflows stipulated by the future contracts, which are uncertain excellently. So, the risk is an uncertain component of financial decisions. It�s not surprising that an important function of financial system is the allocation of risk regarding to interest rate evolution, acts price, exchange rate or the price of certain goods etc. As a matter of fact, also the production process is influentated by a series of generating factors of risks, risks which can be found in the process of projection and implementation of the new high technology, as well as the joining of production factors which means the organisation of work, production and leading.

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Bibliographic Info

Article provided by Spiru Haret University, Faculty of Financial Management and Accounting Craiova in its journal Journal of Applied Economic Sciences.

Volume (Year): 3 (2008)
Issue (Month): 2(4)_Summer2008 ()
Pages: 65-70

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Handle: RePEc:ush:jaessh:v:3:y:2008:i:2(4)_summer2008:p:65-70:21

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Web page: http://www2.spiruharet.ro/facultati/facultate.php?id=14
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Related research

Keywords: risks; financial decisions; risk evaluation;

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