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Lecture notes 4.5.1 Risk & Uncertainty £7.49
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  2.  
  3. PEARSON (PEARSON)
  4.  
  5. Economics B
  6.  
  7. Unit 4 - Making markets work

Lecture notes

Lecture notes 4.5.1 Risk & Uncertainty
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These notes helped me get an A* in A Level Economics, covering all aspects of the specification, plus hints of real world context.

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  • June 15, 2023
  • 1
  • 2022/2023
  • Lecture notes
  • Paddingtion zinzombe
  • All classes

Subjects

  • 411 spectrum of competition 412 barriers to

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4.5.1 Risk & Uncertainty

 Risk is quantifiable uncertainty is not
 Risk that ROI will be less
 Market Imposes risk to influence economic factors
o Exhange rates
o Interest rates
 Uncertainty considers situations that may or may not happen with an unknown outcome

Impact of shocks

 Unforeseen changes which impact economies
 Caused by humans or natural disasters
 2008 financial crisis
o Risk taken by bank

Exchange rate risk and forward markets

 Currency market used to trade one currency for another
 Currencies have effect on markets
 Commodity markets investors trade primary products such as wheat, gold and oil.
 A forward market is an informal financial market where these contracts for future delivery are
made

The Role of insurance in business

 The transfer of risk
 Designed to reduce risk
 People pay the insurance companies a premium to transfer the risk.
 Help them protection

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