Anyone who wants to preserve and protect the value of an economic claim can benefit by understanding what risk factors can cause problems. Risk comes in different forms. Examples include business risk, market risk, liquidity risk, operational risk, legal risk, settlement risk, compliance risk, political risk, and currency risk.

A full-scale appraisal report includes a comprehensive risk analysis that looks at what factors affect value now and what factors are likely to affect value later on.

\There is a close relationship between risk and valuation. Some say that a valuation can be thought of as the pricing of risk.

Even when a formal valuation is not called for, the risk analysis nevertheless looks at what happens to the bottom line if uncertainty is not recognized or if left unmanaged.

Yes. A big part of a proper risk analysis is to identify what factors are likely to cause problems and then estimate the impact. No risk metric is perfect. BVA, LLC routinely evaluates different risk measures for appropriateness, taking into account the advantages and disadvantages of each approach.