,ISR3701 Assignment 1 (COMPLETE ANSWERS) Semester
1 2025 - DUE April 2025; 100% correct solutions and
explanations.
1.Define the term "risk management" and briefly explain what it
entails. Elucidate your answer with examples.(10Marks)
Definition of Risk Management
Risk management is the process of identifying, assessing, and
mitigating potential risks that could negatively impact an
organization, project, or individual. It involves analyzing
potential threats, implementing strategies to minimize their
impact, and continuously monitoring risks to ensure proactive
management.
What Risk Management Entails
Risk management follows a structured approach, which typically
includes the following steps:
1. Risk Identification: Recognizing potential risks that could
affect the organization's objectives.
o Example: A financial institution identifies risks such
as loan defaults, fraud, or economic downturns.
2. Risk Assessment: Evaluating the likelihood and impact of
identified risks.
o Example: A manufacturing company assesses the risk
of supply chain disruptions due to geopolitical
conflicts or natural disasters.
3. Risk Mitigation and Control: Developing strategies to
minimize, transfer, accept, or avoid risks.
, o Example: A construction firm purchases insurance to
transfer the risk of workplace accidents.
4. Implementation of Risk Strategies: Applying risk
management policies and measures to control identified
risks.
o Example: A hospital implements cybersecurity
protocols to prevent data breaches of patient records.
5. Monitoring and Review: Continuously tracking risks and
updating risk management strategies based on changing
conditions.
o Example: A retail company regularly reviews financial
risks to adjust pricing and supply chain strategies.
Examples of Risk Management in Different Sectors
Financial Sector: Banks implement credit risk
management policies to assess borrowers' creditworthiness
and reduce the risk of loan defaults.
Health Sector: Hospitals conduct infection control
measures to minimize the risk of disease outbreaks.
Information Technology: Companies install firewalls and
encryption to protect sensitive data from cyber threats.
Construction Industry: Engineers conduct site risk
assessments to prevent structural failures and workplace
accidents.
Effective risk management helps organizations prevent losses,
improve decision-making, and enhance overall stability in
dynamic environments.
1 2025 - DUE April 2025; 100% correct solutions and
explanations.
1.Define the term "risk management" and briefly explain what it
entails. Elucidate your answer with examples.(10Marks)
Definition of Risk Management
Risk management is the process of identifying, assessing, and
mitigating potential risks that could negatively impact an
organization, project, or individual. It involves analyzing
potential threats, implementing strategies to minimize their
impact, and continuously monitoring risks to ensure proactive
management.
What Risk Management Entails
Risk management follows a structured approach, which typically
includes the following steps:
1. Risk Identification: Recognizing potential risks that could
affect the organization's objectives.
o Example: A financial institution identifies risks such
as loan defaults, fraud, or economic downturns.
2. Risk Assessment: Evaluating the likelihood and impact of
identified risks.
o Example: A manufacturing company assesses the risk
of supply chain disruptions due to geopolitical
conflicts or natural disasters.
3. Risk Mitigation and Control: Developing strategies to
minimize, transfer, accept, or avoid risks.
, o Example: A construction firm purchases insurance to
transfer the risk of workplace accidents.
4. Implementation of Risk Strategies: Applying risk
management policies and measures to control identified
risks.
o Example: A hospital implements cybersecurity
protocols to prevent data breaches of patient records.
5. Monitoring and Review: Continuously tracking risks and
updating risk management strategies based on changing
conditions.
o Example: A retail company regularly reviews financial
risks to adjust pricing and supply chain strategies.
Examples of Risk Management in Different Sectors
Financial Sector: Banks implement credit risk
management policies to assess borrowers' creditworthiness
and reduce the risk of loan defaults.
Health Sector: Hospitals conduct infection control
measures to minimize the risk of disease outbreaks.
Information Technology: Companies install firewalls and
encryption to protect sensitive data from cyber threats.
Construction Industry: Engineers conduct site risk
assessments to prevent structural failures and workplace
accidents.
Effective risk management helps organizations prevent losses,
improve decision-making, and enhance overall stability in
dynamic environments.
