Possible outcomes for three investment alternatives and their probabilities of occurrence are given next. Alternative 1 Outcomes Probability 50 0.40 0.20 80 135 0.40 Failure Acceptable Successful Alternative 1 Alterative 2 Alternative 3 Using the coefficient of variation, rank the three alternatives in terms of risk from lowest to highest. (Do not round intermediate calculations. Round your answers to 3 decimal places.) Coefficient of Variation Alternative 2 Outcomes Probability 70 0.20 130 0.40 265 0.40 Rank Alternative 3 Outcomes Probability 85 0.40 325 0.40 410 0.20

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Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.