Risk management helps the companies to identify the actual risks in it and helps them to take effective decisions to reduce the risk or losses.
Companies basically include risk management in their financial plans as the core portion. Because this helps the firms to reduce the identified risk the managers or policymakers and financial advisors can take effective decisions related to those losses to reduce them as much as they can. Therefore the companies include risk management during their policy development.
As the company is dealing with many plans but there happens a situation of instability in any of the financial plans the risk management will recover that risk or minimize it.
A mortgage is also used as a risk management tool by the banks to reduce the risk after providing loans to companies or to any individual. This mortgage value can compensate or at least can reduce the loss value somehow.
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