Risk Management

Fill in the gaps using words from the box below:

volatility - derivatives - diversification - hedging - credit risk - compliance - liquidity - market risk

1. To protect against price swings in the market, companies use ________ strategies.

2. ________ refers to the possibility that a borrower will not repay their debt.

3. By investing in a wide range of assets, companies can reduce risk through ________.

4. The risk that arises from fluctuations in stock prices, interest rates, or exchange rates is called ________.

5. ________ measures how quickly an asset can be converted into cash.

6. Financial products such as options and futures, used to manage risk, are known as ________.

7. Companies must ensure that they follow all laws and regulations to maintain ________.

8. During periods of high market ________, prices can change drastically in a short time.