Assignment 2 With Updated Solutions (Graded A)

Risk management framework - ANSWER-A foundation for applying the risk management process throughout the organization. Process for Managing Risk - ANSWER--scan environment -identify risks -analyze risks -treat risks -monitor and review Risk Criteria - ANSWER-Information used as a basis for measuring the significance of a risk. Pure Risk - ANSWER-A chance of loss or no loss, but no chance of gain. Speculative Risk - ANSWER-A chance of loss, no loss, or gain. Credit Risk - ANSWER-The risk that customers or other creditors will fail to make promised payments as they come due Subjective Risk - ANSWER-The perceived amount of risk based on an individual's or organization's opinion. Objective Risk - ANSWER-The measurable variation in uncertain outcomes based on facts and data. diversifiable risk - ANSWER-A risk that affects only some individuals, businesses, or small groups. systemic risk - ANSWER-The potential for a major disruption in the function of an entire market or financial system. market risk - ANSWER-Uncertainty about an investment's future value because of potential changes in the market for that type of investment Liquidity Risk - ANSWER-The risk that an asset cannot be sold on short notice without incurring a loss Types of Hazard Risk - ANSWER--Property risk -Legal risk -Personnel risk