For this assignment, you will select a publicly traded entity in any sector and discuss the relationship between risk and reward for a variety of situations.For this assignment, you will write a minimum three-page paper (not including APA title or references pages). In this paper, please address the following questions:
- Discuss the company that you selected
- What is their growth strategy?
- What are the risks?
- What are the rewards?
- Is the relationship of risk and reward sufficiently proportioned? Explain. Why or why not?
Answer preview
Like any other financial institution, WFC faces various risks in its operations. These include market risk, business risks financial risks and political risks. Market risks include interest rate risks and equity risk where interest rates and stock market prices may fluctuate respectively hence affecting the bank’s profitability. Interest rate fluctuation may be mainly as a regulation from the central bank as a monetary policy (Härdle, Hautsch, & Overbeck, 2017). Business risks include strategic risk, where the bank ends up implementing a plan that might end up not yielding the outcome as the anticipated and operational risks where a bank manager, for instance, might fail to counter a money laundering instance which might lead to penalizing by the regulators. Due to increased technology-based threats, WFC also faces cyber risks that might lead to cyber fraud.
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