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ERM 57 Ch 1 Exam Questions & Answers 2024/2025
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ERM 57 Ch 1 Exam Questions & Answers 2024/2025
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ERM 57 Ch 1 Exam Questions &Answers 2024/2025
Enterprise risk management - ANSWERSAn approach to managing all of an organization's key business
risks and opportunities with the intent of maximizing shareholder value.
Pure risk - ANSWERSA chance of loss or no loss, but no chance of gain.
Speculative risk - ANSWERSA chance of loss, no loss or gain.
Credit risk - ANSWERSThe risk that customers or other creditors will fail to make promised payments as
they come due.
Subjective risk - ANSWERSThe perceived amount of risk based on an individual's or organizaion's
opinion.
Objective risk - ANSWERSThe measurable variation in uncertain outcomes based on facts and data.
Diversifiable risk - ANSWERSA risk that affects only some individuals, businesses, or small groups.
Nondiversifiable risk - ANSWERSA risk that affects a large segment of society at the same time.
Systemic risk - ANSWERSThe potential for a major disruption in the function of an entire market or
financial system.
Market risk - ANSWERSUncertainty about an investment's future value because of potential changes in
the market for that type of investment.
Liquidity risk - ANSWERSThe risk that an asset cannot be sold on short notice without incurring a loss.
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