Definition: In the civilization of finance, hazard monitoring describes the exercise of identifying potential risks in advance, analyzing them and taking precautionary measures to reduce/curb the threat.Description: When an entity provides an investment decision, it exposes itself to a number of financial risks. The quantum of such risks depends on the form of financial instrument. These financial risks could be in the develop of high inflation, volatility in resources industries, recession, bankruptcy, etc.So, in order to minimize and also regulate the exposure of investment to such dangers, money supervisors and also investors exercise hazard management. Not providing due prestige to threat management while making investment decisions could wreak havoc on investment in times of financial turmoil in an economic climate. Different levels of threat come attached with different categories of ascollection classes.For instance, a resolved deposit is taken into consideration a much less risky investment. On the various other hand also, investment in equity is taken into consideration a risky venture. While practicing danger management, equity investors and fund managers tfinish to diversify their portfolio so as to minimize the exposure to danger.

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