Midterm1 Flashcards
Define as a set f individual characteristics that are common across all risks in profile
risk profile
A remote storage service that does not require a direct server connection that is?
cloud computing
What are four types of loss exposure?
Property, liability, personnel and net income
define : Cloud computing
is a remote storage service that does not require a direct server connection.
The identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks
Risk Management
List 3 Benefits to organisation of Risk Management ?
Reduce the cost of hazard risk reduce the downside of risk , ability to maximise the profits
The identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks
Risk Management
List Benefit to economy for Risk Management ?
Reduce the waste of resources, Reduce the systematic risk
What are the Risk Management goals ?
Legal and regulatory compliance , survival, business continuity , earning stability
Cost of Risk
is the total costs associated with the possibility of accidental loss that is tied to particular activities or assets
Enterprise Risk Management
is defined as a specific approach in which an organization focuses on managing risks and opportunities while ensuring that stakeholders’ value is maximized. This includes the management of operational, financial, and strategic risk.
The potential for a major disruption in the function of an entire market or financial system.
Systematic Risk
is defined as a set of individual characteristics that are common across all risks in a profile
Risk Profile
the total cost incurred by an organization because of the possibility of accidental loss.
Cost of risk
including losses and failures, are an inevitable aspect of any type of business or speculative risk. Reduce downside risks, organizations can use threshold limits, which can be applied to many types of risks.
Downside risk
use sensors and wireless sensor networks for data collection, transmission, and analysis
Smart products
is the use of objects that are connected through a network and transmit data to computers
Internet of Things (IoT)
is a remote storage service that does not require a direct server connection.
Cloud computing
uses a process called data mining to confirm and verify the data, and then it time stamps the data to add to the Blockchain. The use of the Blockchain for data storage for risk management increases security, immutability, transparency, scalability, and sharing of quality data that has been verified
Blockchain
is the total costs associated with the possibility of accidental loss that is tied to particular activities or assets
cost of risk
is defined as losses and failures that are inevitable regardless of the type of business or speculative risk. Organizations that want to reduce downside risks can use threshold limits based on specific risk criteria that can be applied to various types of risk.
Downside risk
What are the two main categories of commercial insurance policies?
Property and liability
focuses on managing risk within all levels and functions of the organization, which creates a more complete risk portfolio and a profile for an organization. A holistic risk management approach can benefit an organization because this approach creates a full picture of the organization’s risk portfolio and profile, which can help managers make better decisions and improve overall outcomes
Holistic risk management
what is the difference between subjective and objective risk?
subjective - it is based on opinions with in the organization and is the perceived amount of risk.
objective - it is based on facts and data and is a measurable variation in uncertain outcomes.
Categories of Risk:
Hazard risk
Operational risk
Financial risk
Strategic risk
what is the term used to describe the size of the loss?
Severity
What is Exposure ?
Is a measurement that identifies the maximum potential damage that can be associated with any event.
Hazard risk can be categorized by:
- Personnel risk
- Property risk
- Liability risk
Value at Risk (VaR)
VaR measures the probability of a loss in an investment’s value exceeding a threshold level. In addition to working within a short time horizon, VaR is typically characterized by low prob- ability.
Property that has a physical form
tangible property
Quadrants of risks
Hazard Risk, Operational Risk, Financial Risk & Strategic risk
Non - diversifiable Risk
impacts a large section of the population. This type of risk is correlated and can include unemployment, inflation, and any type of natural disaster.
- Hazard risk can be categorized by:
- Personnel risk
- Property risk
- Liability risk