Chapter1

Question 1

Hazard Risk

Answer 1

Earthquake, Landslides,

Question 2

Operational risk

Answer 2

Computer Hacking
Internal and External Fraud ,
The failure to adhere internal Policies
Inability to generate positive cash flow

Question 3

Financial Risk

Answer 3

Handling finances
Default risk
Debt Payment

Question 4

Strategic RIsk

Answer 4

Certain Decision occur by management
expansion in new geography
launch of new product line

Question 5

Data Capture Technology

Answer 5

Smart Product

Internet Of Things

Question 6

Data Storage Technology

Answer 6

Cloud Computing

Block Chain

Question 7

1Reduce the cost of Hazard Risk

2 Reduce The deterrence Effect of Hazard Risk

3 Reduce the Downside Risk

4 Manage the downside risk

5 Take Intelligent Risk

6 Practise Holistic Approach

Answer 7

1 Cost of Insurance
Cost of Administration Risk Management Activities
Cost of Risk Control Techniques

2 Reduce the fear in risk Management people to participate more in investment style
Increase the profit potential

3 By putting threshold value at a point below its not allowed

4 Hedging is an example

5 Provide a Framework for making a new investment

6 Practise Holistic Approach

Question 8

1 Tolerable Uncertainty

2 Legal And Regulator Compliance

3 Survival

4 Business Continuity

Earning Stability

Profitability and Growth

Answer 8

To measure the risk appetite align with the interest of company objective VAR

To organizational Contracts and follow the rule set by federal, state and province authorities

To pay for employees working and let the company just run to survive

Interruption Activities
Interruption accident
StandBy Resource

Forecasting

By working with the benchmark set to achieve that target

Question 9

Risk Measures

1 Exposure

2 Volatility

3 Likelihood

\

Time Horizon

Correlation

Answer 9

The amount exposed to the risk is calculated in many ways but that is the amount at risk
As the exposure increases the risk increase

The fluctuation of prices in the assets the more the profit the more the risk and more volatility

Ability to determine the probability in mathematical terms of event in insurance and risk management

Its a measure of degree to which an occurance could positively or negatively affect the organization
“Risk with Lower Likelihood and Greater Consequences should be managed with risk management “
“Risk with Higher Likelihood and lower Consequences should be managed with normal business operation

Its impossible to control but evaluated and managed

High Correlation Increases risk"

Question 10

Pure Risk

Hazard Risk
Operational Risk

Speculative Risk

Financial Risk
Strategic Risk

Answer 10

1 Loss or No Loss but No Gain

2 Loss or No Loss but Gain
Price Risk :: Involves the movement of Price due to raw material or policies changes

Credit Risk :: Related to the account receivable, generally occur in the bank

Market Risk

Interest Rate Risk

Liquidity Risk

Inflation Risk

Question 11

Subjective

Objective

Answer 11

Based on the opinions

Based on the facts and figure

Question 12

Diversifiable

Non-Diversifiable

Answer 12

This type of risk in a business venture

This type of risk involves unemployment, inflation and type of natural disaster