Derivatives- Topic 1

Hello, How are you today?

Do you have any questions about the course content or assignments?

Our topic today is: Introduction and Overview of risk.

So, what is RISK

• The possibility that an outcome may be better from expectations

• The possibility that an outcome may be worse from expectations

• The possibility that an outcome may differ from expectations

For an investor (in financial market), risk may refer to____?

• fixed expected return

• variability of returns

• lower real return

The "secret" of risk management is to know___?

(multiple correct answers)

• The risks you are exposed to

• If they are big enough to worry about

• If there is anything you can do to protect yourself

• What it will cost to reduce or hedge your risk?

There are two ways to handle risk: (1) Passive risk management and (2) Active risk management.

Which one describes you?

• Passive risk management

• Active risk management

Now, How often do you think about risk in your daily life?

• Rarely

• Sometimes

• Often

• Always

Can you share one potential risk that could happen to us right now in this classroom?

How do you handle the risks you've mentioned?

• Accept it

• Transfer it

• Reduce it

• Eliminate it

Alright, final question!

In the topic 1 content, we talked about various types of risks for businesses. Why do you think businesses are so concerned about these risks?