IDENTIFICATION, MEASUREMENT, AND MITIGATION STRATEGIES OF FINANCIAL RISKS

Financial risk management is one of the most important factors for the successful operations of companies and investors in modern economies. When companies and investors fail to properly measure and manage the financial risks they face, they may encounter serious problems related to potential losses and market uncertainties. These problems can result not only in financial losses but also damage to the reputation and market credibility of companies. Therefore, accurately assessing and managing financial risks is crucial for ensuring the sustainable and successful operations of companies and investors. This study thoroughly examines various tools and strategies used for measuring and mitigating financial risks. Specifically, financial instruments such as Value at Risk (VaR), Expected Shortfall (ES), forward and option contracts, as well as swap operations, play a significant role in risk assessment and mitigation. These tools help investors and financial institutions identify risks in advance and take appropriate actions to address them. Additionally, these tools ensure the protection and optimization of financial portfolios in response to market changes. The methods applied in managing various financial risks also require accurate risk measurement and analysis, which helps reduce future uncertainties.