【正文】 such as changes in market prices. Events with a low probability of occurring, but that may result in a high loss, are particularly troublesome because they are often not anticipated. Put another way, risk is the probable variability of returns. Since it is not always possible or desirable to eliminate risk, understanding it is an important step in determining how to manage it. Identifying exposures and risks forms the basis for an appropriate financial risk management strategy. How Does Financial Risk? Financial risk arises through countless transactions of a financial nature, including sales and purchases, investments and loans, and various other business activities. It can arise as a result of legal transactions, new projects, mergers and acquisitions, debt financing, the energy ponent of costs, or through the activities of management, stakeholders, petitors, foreign governments, or weather. When financial prices change dramatically, it can increase costs, reduce revenues, or otherwise adversely impact the profitability of an anization. Financial fluctuations may make it more difficult to plan and budget, price goods and services, and allocate capital. There are three main sources of financial risk: 1. Financial risks arising from an anization’s exposure to changes in market prices, such as interest rates, exchange rates, and modity prices. 2. Financial risks arising from the actions of, and transactions with, other anizations such as vendors, customers, and counterparties in derivatives transactions 3. Financial risks resulting from internal actions or failures of the anization, particularly people, processes, and systems What Is Financial Risk Management? Financial risk management is a process to deal with the uncertainties resulting from financial markets. It involves assessing the financial risks facing an anization and developing management strategies consistent with internal priorities and policies. Addressing financial risks proactively may provide an anization with a petitive advantage. It also ensures that management, operational staff, stakeholders, and the board of directors are in agreement on key issues of risk. Managing financial risk necessitates making anizational decisions about risks that are acceptable versus those that are not. The passive strategy of taking no action is the acceptance of all risks by default. Organizations manage financial risk using a variety of strategies and products. It is important to understand how these products and strategies work to reduce risk within the context of the anization’s risk tolerance and objectives. Strategies for risk management often involve derivatives. Derivatives are traded widely among financial institutions and on anized exchanges. The value of derivatives contracts, such as futures, forwards, options, and swaps, is derived from the price of the underlying asset. Derivatives trade on interest rates, exchange rates, modities, equity and fixed ine securities, credit, and even weather. The products and strategies used by market participants to manage financial risk are the same ones used by speculators to increase leverage and risk. Although it can be argued that widespread use of derivatives increases risk, the existence of derivatives enables those who wish to reduce risk to pass it along to those who seek risk and its associated opportunities. The ability to estimate the likelihood of a financial loss is highly desirable. However, standard theories of