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ERM Test 2 Questions & Answers 2024/2025 $8.49   Add to cart

Exam (elaborations)

ERM Test 2 Questions & Answers 2024/2025

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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...

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  • August 12, 2024
  • 7
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • ERM
  • ERM
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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 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

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