Applied Risk Management Strategies in the field of M&A

Seminar paper from the year 2006 in the subject Business economics - Investment and Finance grade: 13 University of Applied Sciences Essen course: International Finance language: English 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.