6.2 The evolution of risk management

Question 1

The concept of measuring risk dates from the seventeenth century when two mathematicians, Pascal and Fermat, proposed theories of p___________.

Answer 1

probability

Question 2

The 1950s saw a surge in risk management theory as traditional insurance products did not cover all types of risk, leading to s___-insurance schemes.

Answer 2

self

Question 3

The 1970s saw the use of financial instruments such as d_____________ used for the first time.

Answer 3

derivatives

Question 4

The 1980s saw large companies introducing f_________ risk management.

Answer 4

financial

Question 5

O_____________ and l________ risk management became popular in the 1990s due to some high profile orgaisational failures. and due to increased regulation

Answer 5

Operational

liquidity

Question 6

The introduction of c__________ in the 1990s created both an opportunity to improve risk management, and introduced the threat of cyber risk.

Answer 6

computers

Question 7

The force known as g_____________ meant that markets became more connected, causing risk management to become more complicated and challenging.

Answer 7

globalisation

Question 8

Why did 2002 represent a major regulatory milestone in the US?

Answer 8

Introduction of the Sarbanes-Oxley Act, covering companies listed on the New York Stock Exchange