Exam (elaborations)
RSK2602 EXAM PACK 2023
- Institution
- University Of South Africa (Unisa)
QUESTIONS AND ANSWERS
[Show more]
Content preview
RSK2602EXAM PACK
2023
QUESTIONS AND
ANSWERS
,Questions and answers
Indicate the correct statement with regard to risk and risk management:
1. Risk management should be focused on the upside of possible risk events.
2. A risk event with a high probability of occurring is considered as high risk
event
3. Risk management should be focussed on loss preventing measures.
4. Risk should primarily be view as a negative event
Risk management should be focussed on both the downside and upside of possible
risk event. A risk event with a high probability of occurring is considered a high risk
event. There are two side to risk; the one side tries to prevent a loss or if it occur
minimising is wile the other side takes a risk with the aim of making a profit. Risk
management should be focused on both risks and opportunities. In the light of this,
risk should be viewed from both a positive and negative perspective.
Option contracts are used…..
1. Mainly as anticipatory hedges
2. To hedge against operational risk
3. To hedge against price changes in commodities
4. To finance financial risks
Option contracts are used to hedge against price changes in commodities. Forward
contracts are mainly used as anticipatory hedges. Hedging is used to manage
financial risk and operational risks are not categorised as financial risk. Option
contracts are derivatives, which serve a valuable purpose in providing a means to
manage financial risks, by transferring undesired risk, at a price to another party who
either want to assume the risk or have other offsetting risks.
Derivatives risk arises from…..
1. The failure of customers to pay back loans
2. Hedging activities
3. The decrease in the value of financial portfolios due to market movements
4. The decrease in the value of financial portfolios due to market movements
5. Fluctuations in exchange rates
Derivative risk arises from hedging activities or speculation in the market. Credit risk
arises from the failure of customers to pay back loans. Market risk arises from the
,decrease in the value of financial portfolios due to market movements. Exchange
rate risk arises from fluctuations in exchange rates.
Derivatives aims to over the following types of risk:
a. Prices of commodities
b. Foreign exchange rates
c. Equity
d. Interest rates
1. A, b, c, d
2. A, b, c
3. B, c
4. C, d
Derivatives aim to cover risks associated with prices of commodities, foreign
exchange rates, equity and interest rates.
Credit risk comprises of:
a. Default risk
b. Recovery risk
c. External risk
d. Exposure risk
1. A, b, c
2. A, b, d
3. A, c, d
4. A, b, c, d
Credit risk comprises or default risk, recovery risk and exposure risk.
According to the Basel Committee, 2003, operational risk results from….
a. Any non-financial risk exposure
b. Inadequate and failed internal processes
c. Failures caused by people and systems
d. External events
1. A, b, c, d
2. A, b, c
3. B, c, d
4. A, c
, According to the Basel Committee, 2003, operational risk results from inadequate
and failed internal processes, failures caused by people and systems and external
events.
7 Non-financial risk include amongst other:
a. Country risks
b. Strategic risks
c. Reputational risk
d. Operational risk
1. A, b, c, d
2. A, b, c
3. A, c, d
4. B, c, d
Non-financial risk include amongst others, strategic risk, reputational risk and
operational risk. Country risk is considered a financial risk.
An organization with a conservative approach towards risk has a(n) ……. attitude
towards risk.
1. Indifferent
2. Risk-taking
3. Risk-seeking
4. Risk-averse
An organization with a conservative approach towards risk has a risk-averse attitude
towards risk.
The key drivers that increase the risk profiles of organisations are amongst others:
a. Less vigilant regulatory environment
b. Increased focused on governance.
c. Globalisation
d. More sophisticated consumers.
1. A, d
2. B, c, ,d
3. B, c
4. A, b, c, d
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 EFT, 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 this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller mulah11. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R50,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
81849 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now