Extra Flashcards
What proof do we have that risk management works and is important?
1) A study showed that gold producers that hedge more tend to have larger asset values.
2) Many executive lost their jobs in the 2008 financial crisis due to poor risk management performance.
Principal Terms
Lam - ERM Textbook - pg. 8
What have studies shown are the root causes when publibly traded companies suffer significant market value declines?
Strategic risks represented approximately 60 percent of the root
causes, followed by operational risks (approximately 30 percent) and financial
risks (approximately 10 percent)
Principal Terms
Lam - ERM Textbook - pg. 11
Why is commercial real estate considered riskier than credit card business?
Commercial real estate has a much more volatile loss rate. Higher risk volatility.
ERM concept, framework, and process
Lam - ERM Textbook - pg. 33
What 5 qualities should a CRO have?
1) Leadership skills to hire and retain talented risk professionals
2) Skills to overcome resistance from business units
3) Ability to safegaurd the company’s financial and reputational assets
4) Technical skills in strategic, business, credit, market, and operational risks
5) Ability to educate the board, senior management, and business units
ERM concept, framework, and process
Lam - ERM Textbook - pg. 61
What are the types of cyber attacks?
1) ones that steal information
2) DoS (denial of service). Crash the firm’s websites and apps.
Risk measurement and assessment
Lam - ERM Textbook - pg. 260
What does ISAC mean?
Information sharing and analysis centers. They are government committees integrated in critical industries (like finance, transportation, utilities) to support nationwide defense against cyber crime. (These committees were created because private firms did not want to reveal their security breaches to each other, so they were isolated and vulnerable)
Risk measurement and assessment
Lam - ERM Textbook - pg. 260
