Risk analysis is a technique to identify and assess factors that may jeopardize the success of a project. Risk analysis provides a mechanism for identifying which risks represent opportunities and which represent potential pitfalls. A risk analysis should begin and end with speciﬁc business objectives.
Risk management occurs anytime an investor or entrepreneur analyzes and attempts to quantify the potential for losses in an investment and then takes the appropriate action. Risk management consists of two parts. First, determine what risks exist in an investment. Second, handle those risks in a way best-suited to your investment objectives.