原创力文档Econ 334/434 Finance and Risk Management Econ 334/434 Finance and Risk Management Course coordinator (and Lecturer, First half): Euan Fleming Telephone 6773 2775 Email efleming@une.edu.au Lecturer, Second half: Christie Chang Telephone 6773 2855 Email hchang@une.edu.au Econ 334/434 Finance and Risk Management Sessions: Lecture: Monday, 10 am Lewis Seminar Room Lecture: Tuesday, 9 am LT4 Computer lab: Wednesday, 9 am PCLab2 Computer lab: Thursday, 9 am PCLab2 Topic 1 Introduction to risk in agriculture Topic 1 Introduction to risk Examples of risky decisions Need to take account of risk in agriculture Risk and uncertainty Who needs to think about risk? A general approach to risk management When formal decision analysis is needed Risk and uncertainty Uncertainty is imperfect knowledge Risk is uncertain consequences, particularly exposure to unfavourable consequences To take a risk is to expose oneself to a significant chance of injury or loss Day-to-day decisions and strategic decisions Types and sources of risk in agriculture Business risk production risk price or market risk institutional risk human or personal risk Financial risk leverage other risk (interest rate, calling-in of a loan) Impacts of risk Most people dislike risk They are risk-averse Downside risk refers to situations in which significant deviations from the ‘norm’ more often lead to bad outcomes Example of downside risk Example of downside risk Who needs to think about risk? Farmers Farm advisers Commercial firms selling to and buying from farmers Agricultural research workers Policy makers and planners A general approach to risk management Risk can be thought of as a sort of friction preventing the efficient allocation of resources Risk management is the systematic application of management policies, procedures and practices to tasks of identifying, analysing, assessing, treating and monitoring risk The steps in risk management Establish the context Risk identification Risk analysis Risk assessm
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