Revenue expenditure and Rewarded risk: Difference between pages
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Rewarded and unrewarded risk can be a useful way to analyse risks. | |||
It can indicate whether a particular risk is a legitimate risk for the organisation (and consistent with the organisation’s strategy) or not. | |||
An example of a rewarded risk is a capital investment decision, such as acquiring a business or a new machine, launching a new product and so on. | |||
Such an investment will be made because there is a reasonable expectation of an acceptable net positive return, and hence an expectation of an increase in shareholder wealth. | |||
== See also == | == See also == | ||
* [[ | * [[Return]] | ||
* [[ | * [[Unrewarded risk]] | ||
[[Category: | [[Category:Financial_risk_management]] | ||
Revision as of 16:27, 23 March 2015
Rewarded and unrewarded risk can be a useful way to analyse risks.
It can indicate whether a particular risk is a legitimate risk for the organisation (and consistent with the organisation’s strategy) or not.
An example of a rewarded risk is a capital investment decision, such as acquiring a business or a new machine, launching a new product and so on.
Such an investment will be made because there is a reasonable expectation of an acceptable net positive return, and hence an expectation of an increase in shareholder wealth.
