EXCELCENTRE LEARNING INSTITUTE 061 043 9805
PU E
SHI
NG Y L E NC
OU TO THE GATE OF EXC EL
Education is the most powerful weapon which you can use to change the world
,EXCELCENTRE LEARNING INSTITUTE 061 043 9805
WARNING: PLEASE NOTE THAT PLAGIARISM IS A SERIOUS ACADEMIC
OFFENSE, therefore students must use this document ONLY as a guideline. Hence
students have regenerated their own (personalized) solutions paying particular
attention to module contents as prescribed by module facilitators, lecturers and
supervisors. This document’s purpose is to compact all sources of information that
might be relevant to students’ assignments, hence additional knowledge on the
provided information is not restricted by the authors. However, submitting this
document as one’s final work is considered unethical, and students should be
penalized. If this document is plagiarized by the users and fails, EXCELCENTRE
should not be rendered accountable since the contents in this document only give
learners a kick-start on what is expected of them from their areas of specialty.
CAUTION: STUDENTS ARE NOT MANDATED TO USE EVERY DETAIL IN THIS
DOCUMENT IN WRITING THEIR ASSIGNMENT
Education is the most powerful weapon which you can use to change the world
, EXCELCENTRE LEARNING INSTITUTE 061 043 9805
Table of Contents
QUESTION 1 ............................................................................................................. 5
1.1 Identification of Five Risks Applicable in the Standard Bank Case (10 Marks) .... 5
Legal and Regulatory Risk ...................................................................................... 5
Compliance Risk ..................................................................................................... 5
Operational Risk ..................................................................................................... 5
Reputational Risk.................................................................................................... 6
Money Laundering and Financial Crime Risk ......................................................... 6
1.2 Measures to Mitigate the Identified Risks (5 Marks) ............................................. 7
Strengthening Customer Due Diligence Processes ................................................ 7
Enhancing Compliance Monitoring and Governance .............................................. 7
Improving Transaction Monitoring Systems ............................................................ 7
Strengthening Record-Keeping and Reporting Controls ......................................... 7
Promoting a Strong Risk and Compliance Culture ................................................. 7
QUESTION 2 ............................................................................................................. 8
2.1 Determination of the Expected Return and Standard Deviation of the Loan Portfolio
(11 Marks) .................................................................................................................. 8
Expected Portfolio Return ....................................................................................... 8
Portfolio Variance ................................................................................................... 9
= (0.252)(0.122) + (0.402)(0.142) + (0.352)(0.162) +2(0.25)(0.40)(0.04) +
2(0.25)(0.35)(0.03) + 2(0.40)(0.35)(0.02) = 0.0009 + 0.003136 + 0.003136 +
0.008 + 0.00525 + 0.0056 = 0.026022 Portfolio Standard Deviation ...................... 9
2.2 Significance of Correlation in Credit Portfolio Risk Management (1 Mark) ........... 9
QUESTION 3 ........................................................................................................... 10
Financial Ratio Analysis for Rheno Discount Supermarket (15 Marks) .................... 10
3.1 Current Ratio ...................................................................................................... 10
3.2 Days Accounts Payable Outstanding ................................................................. 10
3.3 Debt-to-Equity Ratio ........................................................................................... 11
Education is the most powerful weapon which you can use to change the world
PU E
SHI
NG Y L E NC
OU TO THE GATE OF EXC EL
Education is the most powerful weapon which you can use to change the world
,EXCELCENTRE LEARNING INSTITUTE 061 043 9805
WARNING: PLEASE NOTE THAT PLAGIARISM IS A SERIOUS ACADEMIC
OFFENSE, therefore students must use this document ONLY as a guideline. Hence
students have regenerated their own (personalized) solutions paying particular
attention to module contents as prescribed by module facilitators, lecturers and
supervisors. This document’s purpose is to compact all sources of information that
might be relevant to students’ assignments, hence additional knowledge on the
provided information is not restricted by the authors. However, submitting this
document as one’s final work is considered unethical, and students should be
penalized. If this document is plagiarized by the users and fails, EXCELCENTRE
should not be rendered accountable since the contents in this document only give
learners a kick-start on what is expected of them from their areas of specialty.
CAUTION: STUDENTS ARE NOT MANDATED TO USE EVERY DETAIL IN THIS
DOCUMENT IN WRITING THEIR ASSIGNMENT
Education is the most powerful weapon which you can use to change the world
, EXCELCENTRE LEARNING INSTITUTE 061 043 9805
Table of Contents
QUESTION 1 ............................................................................................................. 5
1.1 Identification of Five Risks Applicable in the Standard Bank Case (10 Marks) .... 5
Legal and Regulatory Risk ...................................................................................... 5
Compliance Risk ..................................................................................................... 5
Operational Risk ..................................................................................................... 5
Reputational Risk.................................................................................................... 6
Money Laundering and Financial Crime Risk ......................................................... 6
1.2 Measures to Mitigate the Identified Risks (5 Marks) ............................................. 7
Strengthening Customer Due Diligence Processes ................................................ 7
Enhancing Compliance Monitoring and Governance .............................................. 7
Improving Transaction Monitoring Systems ............................................................ 7
Strengthening Record-Keeping and Reporting Controls ......................................... 7
Promoting a Strong Risk and Compliance Culture ................................................. 7
QUESTION 2 ............................................................................................................. 8
2.1 Determination of the Expected Return and Standard Deviation of the Loan Portfolio
(11 Marks) .................................................................................................................. 8
Expected Portfolio Return ....................................................................................... 8
Portfolio Variance ................................................................................................... 9
= (0.252)(0.122) + (0.402)(0.142) + (0.352)(0.162) +2(0.25)(0.40)(0.04) +
2(0.25)(0.35)(0.03) + 2(0.40)(0.35)(0.02) = 0.0009 + 0.003136 + 0.003136 +
0.008 + 0.00525 + 0.0056 = 0.026022 Portfolio Standard Deviation ...................... 9
2.2 Significance of Correlation in Credit Portfolio Risk Management (1 Mark) ........... 9
QUESTION 3 ........................................................................................................... 10
Financial Ratio Analysis for Rheno Discount Supermarket (15 Marks) .................... 10
3.1 Current Ratio ...................................................................................................... 10
3.2 Days Accounts Payable Outstanding ................................................................. 10
3.3 Debt-to-Equity Ratio ........................................................................................... 11
Education is the most powerful weapon which you can use to change the world
