Households and firms are exposed to various risks. Risks facing households include sickness and disability, unemployment risk,

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Question:

Households and firms are exposed to various risks. Risks facing households include sickness and disability, unemployment risk, consumer-durable asset risk, liability risk, and financial-asset risk whereas risks facing firms include production risk, price risk of outputs, and price risk of inputs. Each household or firm may make financial decisions and/or risk-management decisions in the presence of risks.

Households/Consumers:

Carefully identify and evaluate the risks that you are currently facing. Which risk is the most critical one to you or your household? Why?

What risks might the current United States economic situation add to your household?

How do you make financial or economic decisions facing those risks?

Provide your risk-management methods to eliminate, avoid, or reduce the risks that you are facing.

Firms/Producers:

Carefully identify and evaluate the risks that Bank of America is currently facing. Which risk do you think is the most critical one to Bank of America?
What risks might the current United States economic indicators add to Bank of America?
How would Bank of America make financial or economic decisions facing those risks?
Provide Bank of America's risk-management methods to eliminate, avoid, or reduce the risks that Bank of America is facing. Would your company's risk-management methods be different from your household's risk-management methods? Why or why not?