RSK2602 Assignment 1 (COMPLETE
ANSWERS) Semester 2 2025 - DUE
August 20 2025
USER
[Email address]
, RSK2602 Assignment 1 (COMPLETE ANSWERS) Semester 2 2025 - DUE August
2025;.. 1.1 Operational failures caused by staff are driven by error, fraud and data
theft. True/False 1.2 Technology and systems are examples of external drivers of
operational risk management. True/False 1.3 Operational risk is the risk of loss
arising from human error, management failure and fraud or shortcomings in
systems or controls. This would include strategic and reputational risk. True/False
Downloaded by Phuluso Mukwevh () lOMoARcPSD| RSK2602/02/2025 3 1.4 Risk-
indifferent requires no changes in the risk/reward balance in return for an increase
in risk. This attitude is usually not conducive for taking any risks to enhance the
business. True/False 1.5 Self-insurance can be achieved by way of captives.
True/False 1.6 Risk appetite is the financial amount that the organisation is not
prepared to loose. True/False 1.7 The impact of risk exposures can be rated as
probably, possible and remote. True/False 1.8 Risk transfer entails the physical
transfer of the risk to a third party. True/False Downloaded by Phuluso Mukwevh ()
lOMoARcPSD| 4 1.9 The top-down approach to risk management involves only the
top management of an organisation. True/False 1.10 Value-at-risk is used to
determine how portfolios might behave under certain extreme conditions.
True/False (20) Question 2 Explain briefly what is meant by risk appetite and
highlight four principles that could be considered in determining the risk appetite
for an organisation. (10) Downloaded by Phuluso Mukwevh () lOMoARcPSD|
RSK2602/02/2025 5 Question 3 List and explain the cost components that comprise
the overall cost of risk for a business organisation. (10)
✅ Question 1: True/False (20 Marks)
Provide True or False with a brief explanation for each.
1.1 Operational failures caused by staff are driven by error, fraud and data theft.
✅ True
Operational risk includes losses due to human error, fraud, and internal misconduct, such as
employee negligence or data theft.
1.2 Technology and systems are examples of external drivers of operational risk management.
❌ False
Technology and systems are internal drivers of operational risk. External drivers would include
things like changes in regulation, market changes, or natural disasters.
1.3 Operational risk is the risk of loss arising from human error, management failure and fraud
or shortcomings in systems or controls. This would include strategic and reputational risk.
ANSWERS) Semester 2 2025 - DUE
August 20 2025
USER
[Email address]
, RSK2602 Assignment 1 (COMPLETE ANSWERS) Semester 2 2025 - DUE August
2025;.. 1.1 Operational failures caused by staff are driven by error, fraud and data
theft. True/False 1.2 Technology and systems are examples of external drivers of
operational risk management. True/False 1.3 Operational risk is the risk of loss
arising from human error, management failure and fraud or shortcomings in
systems or controls. This would include strategic and reputational risk. True/False
Downloaded by Phuluso Mukwevh () lOMoARcPSD| RSK2602/02/2025 3 1.4 Risk-
indifferent requires no changes in the risk/reward balance in return for an increase
in risk. This attitude is usually not conducive for taking any risks to enhance the
business. True/False 1.5 Self-insurance can be achieved by way of captives.
True/False 1.6 Risk appetite is the financial amount that the organisation is not
prepared to loose. True/False 1.7 The impact of risk exposures can be rated as
probably, possible and remote. True/False 1.8 Risk transfer entails the physical
transfer of the risk to a third party. True/False Downloaded by Phuluso Mukwevh ()
lOMoARcPSD| 4 1.9 The top-down approach to risk management involves only the
top management of an organisation. True/False 1.10 Value-at-risk is used to
determine how portfolios might behave under certain extreme conditions.
True/False (20) Question 2 Explain briefly what is meant by risk appetite and
highlight four principles that could be considered in determining the risk appetite
for an organisation. (10) Downloaded by Phuluso Mukwevh () lOMoARcPSD|
RSK2602/02/2025 5 Question 3 List and explain the cost components that comprise
the overall cost of risk for a business organisation. (10)
✅ Question 1: True/False (20 Marks)
Provide True or False with a brief explanation for each.
1.1 Operational failures caused by staff are driven by error, fraud and data theft.
✅ True
Operational risk includes losses due to human error, fraud, and internal misconduct, such as
employee negligence or data theft.
1.2 Technology and systems are examples of external drivers of operational risk management.
❌ False
Technology and systems are internal drivers of operational risk. External drivers would include
things like changes in regulation, market changes, or natural disasters.
1.3 Operational risk is the risk of loss arising from human error, management failure and fraud
or shortcomings in systems or controls. This would include strategic and reputational risk.
