Why Risk Analysis is Gaining Prominence

Domains like Finance and Economics are not quite new in the world of academics, and both of these domains have evolved through several phases, depending on the problems being faced by the industrial world and the global economic scenario. Both of these domains are not only focused at maximization of wealth, but also maximization of the social welfare. With the development of utility and expected utility theories, the conceptualizations of maximization perspectives have been more prominent. As the time has progressed, the world of business has become more complex, and the risk factors have gained new dimensions. With the advent of new risk dimensions, researchers in the domains of Finance and Economics have also come up with new risk analysis perspectives. Now the question remains, “why risk analysis is becoming so important in the world of academics?”

Subsequent to the global economic crisis, risk analysis in the domains of Finance and Economics has become more prominent. If the financial markets across the world are observed, then it can be experienced that the performances of firms depend largely on several factors, fluctuations in which can lead towards vulnerability of the financial and operational performances of those firms. One of the major factors is the global oil price, which fluctuates based on the international demand and supply scenario and the stability of the international relations. Moreover, fluctuation in global oil prices is reflected in the energy prices, which in turn affects the balance of payment scenario of oil importing nations. Considering oil exporting nations, rise in oil price degrades the human development index of these nations, by and large in terms of access to education and women empowerment scenario. For all these reasons, risk analysis is gaining mounting level of significance among researchers. For more information about various aspects of risk analysis in the domains of Finance and Economics, kindly browse through the pages of www.proassignments.ae.

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