,RSK2602 Assignment 1 (COMPLETE ANSWERS)
Semester 2 2025 - DUE 20 August 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
Question 1: True/False
1.1 True – Operational failures caused by staff are often driven
by human error, intentional fraud, or data theft. These failures
occur when employees make mistakes, act dishonestly, or
misuse sensitive information, impacting the organisation’s
operations and financial stability.
1.2 False – Technology and systems are considered internal
drivers of operational risk because they are part of the
organisation’s infrastructure and processes. External drivers
would include natural disasters, regulatory changes, or market
conditions.
1.3 False – Operational risk refers to the risk of loss arising
from human error, management failure, fraud, or
system/controls shortcomings. Strategic and reputational risks
are distinct categories and are not usually included under
operational risk.
1.4 True – A risk-indifferent attitude implies that an
organisation does not adjust its risk/reward balance even if
the risk increases. This approach generally discourages
, proactive risk-taking that could enhance business growth or
competitive advantage.
1.5 True – Self-insurance can be achieved through captives,
which are insurance subsidiaries created by a parent company
to finance its own risks. This allows the organisation to
manage risks internally rather than relying solely on external
insurers.
1.6 False – Risk appetite is not a financial amount per se; it is
the level of risk an organisation is willing to accept in pursuit
of its objectives. It reflects the organisation’s strategic
preferences, tolerance for uncertainty, and ability to bear
potential losses.
1.7 True – The impact of risk exposures can be rated based on
the likelihood of occurrence as probable, possible, or remote.
This classification helps organisations prioritise risks and
allocate resources effectively.
1.8 False – Risk transfer does not involve physically
transferring risk; it involves contractually shifting the financial
consequences of risk to a third party, such as through
insurance or outsourcing agreements.
1.9 False – The top-down approach involves senior
management setting the overall risk management framework,
policies, and objectives. However, it still requires involvement
Semester 2 2025 - DUE 20 August 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
Question 1: True/False
1.1 True – Operational failures caused by staff are often driven
by human error, intentional fraud, or data theft. These failures
occur when employees make mistakes, act dishonestly, or
misuse sensitive information, impacting the organisation’s
operations and financial stability.
1.2 False – Technology and systems are considered internal
drivers of operational risk because they are part of the
organisation’s infrastructure and processes. External drivers
would include natural disasters, regulatory changes, or market
conditions.
1.3 False – Operational risk refers to the risk of loss arising
from human error, management failure, fraud, or
system/controls shortcomings. Strategic and reputational risks
are distinct categories and are not usually included under
operational risk.
1.4 True – A risk-indifferent attitude implies that an
organisation does not adjust its risk/reward balance even if
the risk increases. This approach generally discourages
, proactive risk-taking that could enhance business growth or
competitive advantage.
1.5 True – Self-insurance can be achieved through captives,
which are insurance subsidiaries created by a parent company
to finance its own risks. This allows the organisation to
manage risks internally rather than relying solely on external
insurers.
1.6 False – Risk appetite is not a financial amount per se; it is
the level of risk an organisation is willing to accept in pursuit
of its objectives. It reflects the organisation’s strategic
preferences, tolerance for uncertainty, and ability to bear
potential losses.
1.7 True – The impact of risk exposures can be rated based on
the likelihood of occurrence as probable, possible, or remote.
This classification helps organisations prioritise risks and
allocate resources effectively.
1.8 False – Risk transfer does not involve physically
transferring risk; it involves contractually shifting the financial
consequences of risk to a third party, such as through
insurance or outsourcing agreements.
1.9 False – The top-down approach involves senior
management setting the overall risk management framework,
policies, and objectives. However, it still requires involvement
