Attempt Q,NO QUESTION

August 24 2022 Attempt 1 3)Define the role of risk management and explain why a large financial loss is not necessarily a failure of risk management?
OCt 21 2022 Attempt 2 Describe the alternatives available to people and firms across the globe to protect themselves from adverse loss exposures. (03)
August 24 2022 Attempt 3 6)How does self insurance differ from the risk assumption as an internal loss financing technique?
August 24 2022 Attempt 4 A big financial loss is not always due to lack of risk management in a company, Elucidate the Statement (4 or 5 marks)
August 24 2022 Attempt 5 company diversify risk
August 24 2022 Attempt 6 Embeded risk management techniques
August 24 2022 Attempt 7 Role of risk management
August 24 2022 Attempt 8 how to manage adverse risk
August 24 2022 Attempt 9 How does self insurance differ from the risk assumption as an internal loss financing technique?
August 24 2022 Attempt mcqs Market development main risk mitigate kerne k liye konsi strategy use kare ge ans is diversification (confirmed)
August 24 2022 Attempt 11 Q16) how does self insurance differ from the Risk awareness as an internal loss financial technique
OCt 21 2022 Attempt 12 Role of risk manager
OCt 21 2022 Attempt 13 How does self-insurance differ from the risk assumption as an interal loss-financing technique? (04)
OCt 21 2022 Attempt 14 What are the types of loss that are dealt with through the use of hedging in financial risk management? Describe the tools that are available to managers dealing with financial risks. (05)
OCt 21 2022 Attempt 15 Q1) condition risk exposure to which yield zero reudced to no risk.
December 22 2022 Attempt 16 3 dimensions of measuring risk
December 22 2022 Attempt 17 1)Appropriateness of hedging risk
December 22 2022 Attempt 18 10) Continuous risk management kiu krty hn?
December 22 2022 Attempt 19 Risk management monitoring purpose
December 22 2022 Attempt 20 risk is priotize in which stage. risk monitor and control, risk management konsa hoga
December 22 2022 Attempt 21 organization unable to find all risk to company
December 22 2022 Attempt 22 .Hedging risk.
Feb 16 2023 Attempt 23 dimensions of risk
Feb 16 2023 Attempt 24 1)3 dimensations of risk and its consequences. 3Marks
Feb 16 2023 Attempt 25 2)how severity of loss affects the choice of risk handling techniques? 5 marks
Feb 16 2023 Attempt 26 Hedging risk in investment
August 24 2022 Attempt 27 People and firm ...loss exposure ko kisay deal krain SAME AS Q2 HERE
August 24 2022 Attempt 28 Self insurance contrast self loss financing technique bi repeat hua hai
August 24 2022 Attempt 29 Q5) Self insurance contrast self loss financing technique
418 Conditions of risk exposure and can not reduce?
Q1 Define the role of risk management and explain why a large financial loss is not necessarily a failure of risk management?
Risk management is the process of managing both downside risks
and business risks. It can be defined as the culture, structures and
st processes that are focused on achieving possible opportunities yet
at the same time control unwanted results.

google Risk management entails three key steps:

1 Identifying and assessing the impact of all risks facing a firm
2 Communicating these risks to decision-makers
3 Continuous monitoring and management of these risks to keep them within healthy limits

A large loss is not always indicative of risk management failure. As long as a firm assesses the
google risks it faces and develops risk management policies that guide all its operations, the
risk management function is considered effective. In other words, the purpose of
risk management is not to reduce losses to zero.

The role of risk management is to identify, assess, and mitigate risks in order to protect an organization's assets, reputation,
GBT and overall well-being. It involves the systematic process of identifying potential risks, analyzing their likelihood and potential impact
, and implementing strategies to minimize or control those risks. Risk management aims to strike a balance between avoiding risks entirely,
accepting risks within tolerable limits, and transferring or mitigating risks through various measures.

risk management cannot eliminate all risks completely. It is not a guarantee against losses or failures
GBT , but rather a proactive approach to minimize and manage risks. Even with effective risk management practices in place,
large financial losses can still occur due to various factors beyond the control of risk management.

Here are a few reasons why a large financial loss does not necessarily indicate a failure of risk management:
1 Unforeseeable events
Examples include natural disasters, economic downturns, or sudden market shifts. These events can cause significant financial losses
that could not have been reasonably anticipated or prepared for.
2 Inherent risk exposure
For example, financial institutions face risks associated with market volatility, regulatory changes, or defaults by borrowers.
Despite implementing robust risk management practices, losses may still occur due to the inherent nature of the business or industry.
3 Human error and misconduct
Risk management involves people making decisions and executing strategies. Human error or misconduct can
undermine even the most well-designed risk management systems. Failure to follow established protocols, negligence, or intentional misconduct can lead to significant financial losses.
4 Strategic risk-taking:
Organizations often engage in strategic initiatives that involve calculated risks. Taking risks is a natural part of business growth and innovation.
Sometimes, despite careful risk management, these strategic endeavors may not yield the expected results, resulting in financial losses.
These losses are considered acceptable within the context of the organization's risk appetite and long-term strategic goals.
roa sawan 5 Loss of Key personnel
If a key person becomes unable to work or dies, the business might lose valuable accounts or be temporarily unable to operate, resulting in lost revenue
roa sawan 6 Key customer declared bankrupt (Credit risk)
Credit risk is the risk of losses from bad debts or delays by customers in the
settlement of their debts. All companies that give credit to customers are exposed
 to credit risk. T

Q2 Describe the alternatives available to people and firms across the globe to protect themselves from adverse loss exposures. (03)
Adverse loss exposures refer to situations where individuals or firms face potential losses due to various risks.
The alternatives available to protect themselves from such adverse loss exposures are as follows:

1) retention, best for exposures with small potential financial consequences

copy paste questio2) personal insurance protection, best for exposures with significant potential financial consequences
from a website 3) employee benefits plans, targeted to specific exposures such as retirement and health care expenses
4) corporate risk management, appropriate to a firm with significant loss exposures.

or
heading from chat gbt , content for study text
1 Risk transfer
Risk transfer involves passing some or all of a risk on to someone else, so that the other person has the exposure to the risk.
A common example of risk transfer is insurance. By purchasing insurance, risks are transferred to the insurance company,
which will pay for any losses covered by the insurance policy. Using insurance to manage risk is appropriate for risks
where the potential losses are high, but the probability of a loss occurring is fairly low.

2 Diversification
Risks can be reduced through diversification. Diversification is also called
‘spreading risks’.
The purpose of diversification in business is to invest in a range of different
business activities, and build up a portfolio of different business activities. Each
individual business activity is risky, but some businesses might perform better than
expected just as some might perform worse than expected. Taking the entire
portfolio of different businesses, the good performers will offset the bad
performers, and the portfolio as a whole might provide, on average, the expected
returns.

3 Risk retention
means accepting the risk, in the expectation of making a
return. When risks are retained, they should be managed, to ensure that
unnecessary risks are not taken and that the total exposure to the risk is
contained within acceptable limits.

4 Risk avoidance
means not having any exposure to a risk. A business risk can
only be avoided by not investing in the business. Risk avoidance therefore
means staying out of a business, or leaving a business and pulling out of the
market.

5 Hedging risks
The term ‘hedging’ risks is used extensively in the financial markets to protect against adverse
price movements or fluctuations, and hedging is commonly associated with the management of
 financial risks such as currency risk. Hedging risk means creating a position (making a transaction)
that offsets an exposure to another risk.

6 Risk Mitigation
: Risk mitigation focuses on reducing the likelihood or impact of potential risks
By mitigating risks, individuals and firms aim to prevent or minimize potential losses.

Q3 How does self insurance differ from the risk assumption as an internal loss financing technique?
CHATGBT full Self-insurance and risk assumption are both internal loss financing techniques, but they differ in their approach and implementation

self-insurance involves setting aside specific reserves to cover potential losses, providing greater control and flexibility.
Risk assumption, on the other hand, involves accepting the risk without necessarily designating specific reserves,
relying on available resources to cover losses. Both approaches involve internal financing of losses, but the main difference lies in the
level of control, reserves, and flexibility associated with each technique

Self-Insurance:
Self-insurance is a strategy where an individual or organization sets aside funds or establishes reserves to cover
potential losses or liabilities instead of purchasing insurance from an external provider. In self-insurance,
the entity retains the risk and assumes the responsibility for paying for any losses that occur.

Risk Assumption: relies on existing financial resources without creating separate reserves,
Risk assumption, as an internal loss financing technique, involves accepting and retaining the
financial risk associated with potential losses without necessarily setting aside specific reserves or funds.
Instead of relying on insurance or external financing, the entity assumes responsibility for covering
losses through its general operating budget or available financial resources.

Q4 company diversify risk

study text Diversification is the Approaches to the management of business risks,
Risks can be reduced through diversification. Diversification is also called
‘spreading risks/investments’.

The purpose of diversification in business is to invest in a range of different

business activities, and build up a portfolio of different business activities. Each
individual business activity is risky, but some businesses might perform better than
expected just as some might perform worse than expected. Taking the entire
portfolio of different businesses, the good performers will offset the bad
performers, and the portfolio as a whole might provide, on average, the expected
returns.

Example: Diversification
Investors in shares often diversify their investment risks by investing in a portfolio of
shares of different companies in different industries and different countries.
Some investments will perform well and some will perform badly. The losses on poorperforming
shares should be offset by higher-than-expected returns on others. Risk is also reduced
because if an investor suffers a loss on some shares, the rest of the investment portfolio retains its value.
 The maximum loss in any single investment is limited to the amount that has been invested in the shares of that company.

Q5 Embeded risk management techniques

Embeded risk management in the culture and values of an org includes:
1 Aligning individual goals with those of the organisation
2 Including risk management responsibilities within job descriptions
3 Establishing reward systems which recognise that risks have to be taken in practice (e.g. not having a 'blame' culture)
4 Establishing metrics and performance indicators that can monitor risks and provide an early warning if it
is seen that risks will actually occur and affect the organisation
5 Informing all staff in an organisation of the need for risk management, and publishing success stories to show
how embedding risk management in the culture has benefited both organisation and staff.

Q6 Role of risk management

1 Risk management is the process of managing both downside risks
and business risks. It can be defined as the culture, structures and
processes that are focused on achieving possible opportunities yet
at the same time control unwanted results.

2 The Cadbury Report (1992) described risk management as 'the

process by which executive management, under board supervision,
identifies the risk arising from business . . . and establishes the
priorities for control and particular objectives'.

chat gtb 3 The role of risk management is to identify, assess, and mitigate potential risks that could impact
an organization's objectives and operations.

4 Risk mangaement have a responsibility to safeguard the assets of the

company , reputations , financial stability ,and to protect the investment of the shareholders ,

Q7 how to manage adverse risk

heading from gbt Managing adverse risk involves implementing strategies and actions to minimize the potential negative impact
content form of risks on an organization
study text
1 Risk Identification
to identify what the risks are in a particular situation, strategy, procedure or system. Risks change continually in
nature. Existing risks may disappear, and new risks may
emerge. It is therefore essential to identify what the current
risks are, especially for companies that operate in a volatile
business environment.

2 Risk Assessment
The assessment of risk is sometimes called ‘risk profiling’ or ‘risk
mapping’.
 When the risks have been identified,
the next step should be to assess them. The probability of an
adverse event or outcome, and the impact of an adverse
event should be measured. A risk can be assessed by its
expected loss
#expected loss = probability * impact

The format of a simple risk map is shown below

High impact Low probability High impact High probability

Consider the need for control Take immediate action to control the risk
measures, such as insurance

Low impact Low probability Low impact High probability

Review periodically Consider the need for
control action

3 Risk Mitigation Strategies

: Risk mitigation focuses on reducing the likelihood or impact of potential risks
By mitigating risks, individuals and firms aim to prevent or minimize potential losses.
This may involve:
implementing controls, safeguards,
procedures to prevent or detect risks
Consider techniques such as
1 risk avoidance (eliminating activities that pose high risks),
2 risk reduction (implementing measures to reduce risks)
3 risk transfer (shifting risks to other parties through insurance or contracts)
4 risk acceptance (acknowledging and preparing for risks that cannot be fully mitigated).

4 Monitoring and Review

Continuously monitor and review risks to ensure that mitigation strategies remain effective and relevant.

MCQS Q8 Market development main risk mitigate kerne k liye konsi strategy use kare ge
Diversification
Cost leadership
Strategic alliance
answer: In market development, a strategy that can be effective in mitigating risks is diversification
Q9 Role of risk manager
A risk manager might be given responsibility for all aspects of risk.
Alternatively, risk managers might be appointed
to help with the management of specific risks, such as:
1 Insurance
2 Health and safety
3 Information systems and information technology
5 Human resources
5 Financial risk or treasury risk
6 Compliance (with specific aspects of the law or industry regulations)

A risk manager is not a ‘line’ manager and is not directly

responsible for risk management. His role is to provide
information, assistance and advice, and to improve risk
awareness within the entity and encourage the adoption of
sound risk management practice.

The role of a risk manager might therefore include:

1 Helping with the identification of risks.
2 Establishing ‘tools’ to help with the identification of risks.
3 Establishing modelling methods for the assessment and
measurement of risks.
4 Collecting risk incident reports (for example, health and
safety incident reports).
5 Assisting heads of departments and other line managers in
the review of reports by the internal auditors.
6 Preparing regular risk management reports for senior
managers or risk committees.
7 Monitoring ‘best practice’ in risk management and
encouraging the adoption of best practice within the
entity.