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Financial Risk Management Financial risk management is the practice of creating economic value in a firm by using financial instruments to manage exposure to risk , particularly credit risk and market risk . Other types include Foreign exchange, Shape, Volatility, Sector, Liquidity, Inflation risks, etc. Similar to general risk management , financial risk management requires identifying its sources, measuring it, and plans to address them. Financial risk management can be qualitative and quantitative. As a specialization of risk management, financial risk management focuses on when and how to hedge using financial instruments to manage costly exposures to risk. |
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