RMI 2101 QUIZ #2 UPDATED ACTUAL Questions And Correct Answers
C
Terms in this set (23)
Traditional Risk Management TRM - pure risk
- managing safety, purchasing insurance and controlling financial recovery
4 loss exposures
1. property
2. net income
3. personnel
4. liability
silo approach
- property/liability pure risk = risk manager (hazard risk)
- personnel risk = HR
- operation risk = COO/business units
- financial risk = CFO
- strategic risk = CEO/ board of directors
, Enterprise Risk Management ERM - maximizing the organizations value
- very strategic approach
- breakdown into quadrants
1. Hazard Risks: fire, floods, lawsuits (liability), generally pure
2. Financial Risk: inflation, foreign exchange rates, stock market, interest rates,
volatility, liquidity, credit, debt rating, MOSTLY SPECULATIVE
3. Operational Risk (risk that arise from business operations)
- commerce bank
- manufacturing issues: supply chain issues, service provider failures, system
failures, product recall
- regulatory issues
- employment practices/company policies and procedures
-discrimination, turnover, workplace violence
4. Strategic or Business Risk (SWOT)
- block buster: customer service issues, public relations, competition, bad
business decision, intellectual property, ethics, union issue, MOSTLY
SPECULATIVE
Steps in the risk management process 1. identify loss exposure: possibility of financial loss as the result of pernil striking a
1. identification of exposures to loss thing of value
2. evaluate exposures to loss - shit happens
3. identify possible alternatives - anything that costs us money
4. select among alternatives - most crucial step
5. implemenataion of the chosen options - failure to identify can lead to bankruptcy
6. re-evaluate periodically chosen strategies - enron
Steps in the risk management process 2. analyze exposure to loss: estimated likelihood of possible losses identified in 1.
1. identification of exposures to loss - loss frequency
2. evaluate exposures to loss - loss severity
3. identify possible alternatives - total dollar loss
4. select among alternatives - timing
5. implemenataion of the chosen options
6. re-evaluate periodically chosen strategies
C
Terms in this set (23)
Traditional Risk Management TRM - pure risk
- managing safety, purchasing insurance and controlling financial recovery
4 loss exposures
1. property
2. net income
3. personnel
4. liability
silo approach
- property/liability pure risk = risk manager (hazard risk)
- personnel risk = HR
- operation risk = COO/business units
- financial risk = CFO
- strategic risk = CEO/ board of directors
, Enterprise Risk Management ERM - maximizing the organizations value
- very strategic approach
- breakdown into quadrants
1. Hazard Risks: fire, floods, lawsuits (liability), generally pure
2. Financial Risk: inflation, foreign exchange rates, stock market, interest rates,
volatility, liquidity, credit, debt rating, MOSTLY SPECULATIVE
3. Operational Risk (risk that arise from business operations)
- commerce bank
- manufacturing issues: supply chain issues, service provider failures, system
failures, product recall
- regulatory issues
- employment practices/company policies and procedures
-discrimination, turnover, workplace violence
4. Strategic or Business Risk (SWOT)
- block buster: customer service issues, public relations, competition, bad
business decision, intellectual property, ethics, union issue, MOSTLY
SPECULATIVE
Steps in the risk management process 1. identify loss exposure: possibility of financial loss as the result of pernil striking a
1. identification of exposures to loss thing of value
2. evaluate exposures to loss - shit happens
3. identify possible alternatives - anything that costs us money
4. select among alternatives - most crucial step
5. implemenataion of the chosen options - failure to identify can lead to bankruptcy
6. re-evaluate periodically chosen strategies - enron
Steps in the risk management process 2. analyze exposure to loss: estimated likelihood of possible losses identified in 1.
1. identification of exposures to loss - loss frequency
2. evaluate exposures to loss - loss severity
3. identify possible alternatives - total dollar loss
4. select among alternatives - timing
5. implemenataion of the chosen options
6. re-evaluate periodically chosen strategies
