Video: Financial Risk Management Overview and Objectives

In this lesson, Nick Palazzolo, CPA, offers an engaging introduction to Financial Risk Management by comparing the stock market to a casino, humorously emphasizing the inherent risks involved. He prepares to delve into the various types of risks that companies face, signaling that there will be plenty of visuals to help illustrate his points. The learning objectives set forth include calculating and using ratios to quantify various financial risks such as those related to interest rates, currency exchange, and liquidity, as well as identifying strategies for mitigating these risks. Nick's approach is focused on making the content enjoyable and emphasizing the necessary balance between risk and reward in the business world. The goal, he notes, is not just to prepare for successful risk management but also to ensure the exam doesn't "win," highlighting the upbeat and approachable tone of the lesson.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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What do you mean, gambling is risky? I don't know what you're talking about. Welcome to Financial Risk Management, where we advise you not to lose your money at the casino, also known as the stock market. So, what are we going to talk about here in Financial Risk Management? Well, there's just a lot of different types of risk, and you're going to get sick of them.

I'll show you lots of graphics and charts and tables. There's all these different types of risks that companies need to account for when making decisions. If you choose decision A, there are certain risks. Decision B, there are other risks.

A lot of good, wonderful topics here. Let's see what our learning objectives are for today. All right, well, we do want to calculate and use ratios and measures to quantify risks associated with interest rates, currency exchange, liquidity prices, et cetera, in a business entity. A lot of that we will see for sure. Next, we want to identify strategies to mitigate financial risks.

Well, if you can't limit those risks and deal with them, then what's the point? I'm not even going to mention all the different types of risks, like currency risk and so on. We're going to quantify the impact on a business entity. We are a company. We want to make sure that we are not taking too much risk. Risk, obviously no risk, no reward. But that being said, we want to mitigate as much as possible. Let's dive in, talk a lot about what we've got here and have a good time with it. We always want to have a good time, because if we're not, then the exam is winning. Right?

Let's get to it.

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