ERM Test 2 Questions & Answers 2024/2025
what are the categories of risk decision making? - ANSWERSdefining risk appetite and risk limits
integrating ERM into decision making
How does a risk appetite get defined? - ANSWERSERM committee meets
then there is a information for risk appeti...
what are the categories of risk decision making? - ANSWERSdefining risk appetite and risk limits
integrating ERM into decision making
How does a risk appetite get defined? - ANSWERSERM committee meets
then there is a information for risk appetite consensus meeting
then the actual risk appetite consensus meeting happens
risk appetite is defined
who is typically on the ERM committee? - ANSWERSCEO (chair of ERM committee)
CRO (head of ERM team)
CFO
Heads of business segments
Chief legal counsel
Head of compliance (nonvoting)
Head of internal audit (nonvoting
what information do you need for risk appetite consensus meetings? - ANSWERSEnterprise risk exposure
, individual risk scenario exposures
mitigation options (Shows how much enterprise risk exposure can feasibly be moved / helps define an
achievable risk appetite
hard limits should... - ANSWERSrarely, if ever, be violated
purpose of soft limits - ANSWERSSoft limits set as buffer
Triggers escalating actions
examples:
Shift to higher level approval for further risk-taking
Exploration of mitigation
ANY decision risk or return priority.... - ANSWERScan be informed with ERM information
how can ERM information affect risk/return priority - ANSWERSRecalculate risk and return metrics
Revise distributable cash flow projection
Revise discount rate (tentative, pending review of #5, which may require another iteration)
Recalculate baseline company value
Revise key risk scenarios
Recalculate enterprise risk exposure
Evaluate risk-return trade-off
Impact on enterprise risk exposure
Impact on downside standard deviation
Impact on baseline company value
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Bensuda. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.49. You're not tied to anything after your purchase.