Another definition emphasizes that risk is expressed by the uncertainty of cost or expense. If the uncertainty of income or cost is used to represent risk, it means that the result of risk may bring loss, profit or no loss or profit, which is a generalized risk. The owner's exercise of ownership should be regarded as management risk, and financial risk belongs to this category.
The uncertainty of risk shows that risk can only be expressed as loss, and there is no possibility of profit from risk, which belongs to narrow sense risk. Risk and income are in direct proportion, so radical investors tend to take high risks in order to get higher income, while cautious investors focus on security considerations.
Risk classification:
First, according to the nature
1. pure risk: pure risk refers to the risk that only opportunities are lost and there is no possibility of profit. For example, the fire risk faced by house owners and the collision risk faced by car owners. When there is a fire collision, they will suffer economic losses.
2. Speculative risk: Compared with pure risk, speculative risk refers to both the risk of losing opportunities and the risk of possible gains. There are generally three consequences of speculative risk: first, there is no loss; Second, there are losses; The third is profit. For example, buying and selling stocks in the stock market has three consequences: making money, losing money and not losing money, so it belongs to speculative risk.
Second, according to the goal
1. Property risk: Property risk refers to the risk of damage, loss or devaluation of all tangible property and the risk of economic or monetary loss. Such as factories, machinery and equipment, finished products, furniture, etc. Will face risks such as fire, earthquake and explosion; During the voyage, ships may suffer from risks such as sinking, collision and grounding.
Property losses usually include direct losses and indirect losses of property.
2. Personal risk: Personal risk refers to the risk of disability, death, loss of work ability and increased medical expenses due to guidance. For example, people will die young, disabled, incapacitated or helpless in old age due to physiological laws such as birth, aging, illness and death and natural, political and military reasons.
There are generally two kinds of losses caused by personal risks: one is the loss of income ability; One is the loss of extra expenses.
3. Liability risk: Liability risk refers to the risk of causing property loss or personal injury to others due to negligence or negligent behavior of individuals or groups, and bearing civil legal liability according to law, contract or morality.
4. Credit risk: Credit risk refers to the risk that the obligee and obligor suffer economic losses due to one party's breach of contract or violation of law in economic exchanges. For example, in import and export trade, exporters (or importers) will suffer economic losses because importers (or exporters) fail to perform contracts.
Third, according to behavior
1. specific risk: the risk that has a causal relationship with a specific person, that is, the risk caused by a specific person, and the loss only involves a specific individual. Such as fire, explosion, theft, other people's property damage or personal injury, etc. all belong to this category.
2. Basic risk: the risk that its damage will spread to society. The cause and effect of basic risk has nothing to do with specific people, at least it is a risk that individuals can't stop. Social or political risks and risks related to natural disasters are basic risks. Such as earthquake, flood, tsunami and economic recession.
Fourth, according to the production environment
1. Static risk: Static risk refers to the risk of loss or damage caused by irregular changes of natural forces or people's negligence under normal social and economic conditions. Such as lightning, earthquake, frost, storm and other natural causes of loss or damage; Loss or damage caused by fire, explosion, accidental injury, etc.
2. Dynamic risk: Dynamic risk refers to the risk of loss or damage caused by changes in social economy, politics, technology and organization. Such as population growth, capital increase, improvement of production technology, changes in consumer preferences, etc.
Five, according to the cause
1. Natural risk: Natural risk refers to the risk that social production and social life are threatened by irregular changes of natural forces. Natural phenomena such as earthquakes, storms, fires and various plagues occur frequently and in large numbers. Among all kinds of risks, natural risk is the most insured risk by insurance companies.
Natural risks are characterized by:
(1) Uncontrollability of natural risk formation
(2) The periodicity of natural risks.
(3) The consequences of natural risk accidents are * * *, that is, once natural risk accidents occur, they often involve a wide range of objects.
2. Social risk: Social risk refers to the risk that social production and people's lives will suffer losses due to the actions (including negligent actions, improper actions and intentional actions) or omissions of individuals or groups. Theft, robbery, dereliction of duty, vandalism and other acts may cause property damage or personal injury to others.
3. Political risk (country risk): Political risk refers to reasons beyond the control of both parties due to political reasons or in the process of foreign investment and trade; The risk that creditors may suffer losses. The import of goods is suspended due to war or civil strife in the importing country; Because the importing country implements import or foreign exchange control.
4. Economic risk: Economic risk refers to the risk of business failure due to the influence of various factors such as market supply and demand, economic and trade conditions, or the operator's decision-making mistakes, such as deviating from the prospect expectation. For example, the increase or decrease of enterprise production scale, price fluctuation and operating profit and loss.
5. Technical risk: Technical risk refers to the risk that threatens people's production and life with the development of science and technology and the change of production mode. Such as nuclear radiation, air pollution and noise.
Extended data:
Ways to reduce risks:
1. Diversified selection
Diversification means that consumers can take diversified actions to reduce risks when planning a risky economic activity in the future.
2. Risk diversification
Investors eliminate risks by investing in many projects or holding shares in many companies. This way of holding assets in various forms can avoid the risk of holding a single asset to a certain extent, so that investors' return on investment will be more certain.
3. Risk transfer (insurance)
When consumers face risks, risk evaders will be willing to give up part of their income to buy insurance. If the price of insurance is exactly equal to the expected loss, risk evaders will buy enough insurance, so that they can be fully compensated from any possible loss, and the utility brought by income is higher than that brought by the unstable situation of high income without loss and low income with loss.
In addition, consumers can protect themselves. First, they can adopt diversified asset portfolios, such as buying mutual funds; The second is to deposit funds in some funds to offset future losses or income reduction.
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