Description
Module 04 Written Assignment - Measuring Risk
For this assignment, you will write a three to four page research paper in which you describe at least three ways in which risks are measured, including value-at-risk and credit scoring, in a manufacturing business. In this paper, please address the following questions:
- How does Value-at-Risk affect investing for a manufacturing firm?
- How might a manufacturing business be affected by credit scoring?
- What other investment and financial risks are associated with manufacturing?
- How might the investment and financial risks of your manufacturing firm be mitigated?
- Does the firm have an effective plan for managing risks? Explain.
Requirements
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Submit your completed assignment to the drop box below. Please check the Course Calendar for specific due dates.
Module 04 Written Assignment - Measuring Risk
Scoring Rubric:
Criteria | Weight |
Discussed the effect of Value-at-Risk on a manufacturing firm- what is VAR and what’s the effect | 20 |
Discussed the effect of credit scoring on a manufacturing firm- what is credit score and how effected. | 25 |
Identified and discussed investing and financial risks associated with manufacturing- ID/Discuss Investing AND ID/Discuss financial risks. | 35 |
Discussed ways to mitigate investing and financial risks for manufacturing- How are they going to accomplish this? | 10 |
The assignment met the minimum page length of 3 pages | 5 |
The assignment included a brief introduction and conclusion, demonstrated the use of library resources, and demonstrated proper APA mechanics | 5 |
Total | 100 |
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Explanation & Answer
Attached.
Measuring Risk – Outline
Thesis statement: For the case of a busy manufacturing company, investment risk, financial
risk, credit scores and mitigation of risks are concepts that the management should be well
versed with to ensure a good company performance.
I. Introduction
II. Body
A. Value at Risk importance.
B. Impact of Credit scores on a company.
C. Investment and financial risks associated with manufacturing companies.
D. Mitigating the investment and financial risks can be mitigated.
E. Plan for managing risks.
III. Conclusion.
Running head: MEASURING RISK
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Measuring Risk
Name
Institution
MEASURING RISK
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Measuring Risk
Introduction
Manufacturing companies require a lot of capital investment from both banks and
investors. As such, these companies are exposed to both investment and financial risks that call
the need for proper management and planning. Conducting a market risk for a company under
Value at risks calculations should be done at regular intervals to ensure that the management is
aware of the market risk the company is exposed to and the measures to take. A company that
frequently requires financing from banks is recurrently required to be rated regarding the credit
scores to determine its capability in repaying the loan. For the case of a busy manufacturing
company, investment risk, financial risk, credit scores and mitigation of risks are concepts that
the management should be well versed with to ensure a good company performance.
Critical Analysis
The Value at Risk gives a summary of statistics that can quantify the exposure of any
company to a market risk. Through the VAR model, a firm can estimate the probability of
maximum loss during a given time. The risk management department co...