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Risks addressed by the Enterprise Risk Management Model
Professionals in the field of risk management generally recognize eight major types of risk:


 * Strategic risk: The risk that corporate business strategies are flawed and not executed effectively. Based on the importance of of a company’s strategic plan (e.g. mergers and acquisitions, growth strategies, product innovation).


 * Business risk: The probability that financial or operating results may not meet stakeholder expectations. Results be projected by the earnings per share (EPS) for the coming year. The risks involved may pertain to market share, new customers, and pricing.


 * Exchange rate risk: The likelihood that foreign exchange rates will move against the interest of the company or its subsidiaries. Hedging against this risk is often done with futures contracts.


 * Compliance risk: The probability an enterprise or its foreign subsidiaries may be fined or prosecuted as consequence of violating government laws and regulations.


 * Market risk: The inherent risk of prices and interest rates having a negative impact on a company’s value.


 * Credit risk: The probability a company’s customers or suppliers may default on their obligations.


 * Liquidity risk: The probability that a company does not have the ability to meet its financial obligations in a timely manner. Liquidity risk can managed by converting assets or incurring further liabilities.


 * Operational risk: The risk that corporate processes may fail as a result of human or system error. Operational risk may also pertain to the interruption of business due to external hazard (e.g. earthquake, fire, flood).