Applied Risk Management Strategies in the field of M&A

Scholarly Paper (Advanced Seminar) aus dem Jahr 2006 im Fachbereich Wirtschaft - Investition und Finanzierung, einseitig bedruckt, Note: 1,3, Fachhochschule für Ökonomie & Management Essen, Veranstaltung: International Finance, Sprache: Englisch, Abstract: Risk minimization and return maximization is what managers, shareholders and even private investors aspire. However, risk and return are highly correlated so that investors have to manage this trade-off. Risk management is thus essential both for investment managers and company executives. Within portfolio management and corporate practice risk can be reduced by diversification.In the "Risk Management" part Portfolio Theory - particularly Markowitz' Portfolio Selection - is to be introduced and the most common measures of risk i.e. volatility, covariance, correlation and the beta factor are to be presented.The next section refers to Mergers and Acquisitions and starts with a general intro-duction of the topic. Afterwards, M&A is to be related to diversification as a means of risk minimization. Finally, by the example of ThyssenKrupp, the theoretical assumptions of the first two parts are to be applied.