The basis of risk management and control is risk identification.

Risk identification means that before a risk accident occurs, people use various methods to systematically and continuously understand the various risks they face and analyze the potential causes of the risk accident.

The four basic methods of controlling risk are: risk avoidance, loss control, risk transfer and risk retention.

1. Risk avoidance means that investment entities consciously give up risky behaviors and completely avoid specific loss risks. Simple risk avoidance is the most negative risk management method, because when investors give up risky behaviors, they often also give up potential risks.

Target income; 2. Loss control is not to give up risks, but to formulate plans and take measures to reduce the possibility of losses or reduce actual losses. The stages of control include three stages before, during and after the event. The purpose of prior control is mainly to

To reduce the probability of loss, the control during and after the event is mainly to reduce the actual loss; 3. Risk transfer refers to a risk treatment method that transfers the risk to another person or unit through contractual or non-contractual means.

Transfer is the transfer of the responsibility for losses caused by risks. In the international sale of goods, it specifically means that the risk of the goods originally borne by the seller is transferred to the buyer at some point. In the absence of an agreement between the parties, the main issue with risk transfer is

When does the risk transfer from the seller to the buyer? 4. Risk retention, also known as risk taking, refers to an enterprise's own initiative to bear risks irrationally or rationally, that is, it refers to an enterprise using its internal resources to make up for losses, which is the same as insurance.

It is the main financing method and important risk management method for enterprises after losses occur. It is more popular among large enterprises in developed countries.