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Risk compounding refers to the phenomenon where multiple risks come together to create a larger, more complex risk. This can happen in various areas, such as finance, business, and even in our personal lives. It is important to understand the concept of risk compounding as it can have a significant impact on decision-making and risk management strategies. Essentially, when risks compound, the potential consequences become more severe and difficult to manage. This is why it is crucial to identify and address individual risks before they have a chance to compound. As a financial professional, it is essential to have a thorough understanding of risk compounding and its implications in order to make informed and strategic decisions.

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