What principles are essential to an effective risk management program?

Q: What determines the acceptable level of Detection Risk?

A: Detection Risk:   It is a chance that an auditor will fail to identify any material misstatement…

Q: Name two risk management models and how any of them can resolve an operational risk problem.

A: Risk management is that the process of recognising, analysing, and accepting or mitigating…

Q: Explain the difference between unique risk and systematic risk

A: Answer

Q: Explain the types of risk?

A: Introduction: There is a risk involved in any company decision, and in personal life decisions. In…

Q: Define Risk aversion

A: A risk averse saver is an investor who favors inferior returns with recognized risks somewhat than…

Q: Should managers estimate intrinsic values or leave that to outside security analysts?Explain.

A: Intrinsic value of a stock is perceived value of a stock using analysis of book values of the…

Q: What is risk? What is the difference between systematic and unsystematic risk?

A: Risk: Risk can be defined as upcoming uncertainty about variation from anticipated earnings or…

Q: What are quantitative measurements versus non-quantitative measurements with respect to risk?

A: Risk is used to describe the probability or uncertainty related to a future event with a favorable…

Q: What are some actions that companies can take tominimize or reduce risk exposures?

A: The following are the actions utilized by companies to reduce exposure of risk: A company can…

Q: What is takaful and how it can be used as a risk mitigation tool and write down the names of types…

A: Takaful may be a style of monotheism insurance whereby members contribute cash into a pool system to…

Q: Define within-firm risk

A: Within-firm risk: Corporate (within-firm) risk is a hazard identified with an individual business.…

Q: What types of information must be considered when it comes to risk and return?

A: Risk and return go hand in hand both are related to each other.There is direct correlation between…

Q: In the context of your organization, evaluate its main sources of potential financial risk using…

A: Financial risk: Financial risk is defined as the chance of uncertainty in a financial incident, such…

Q: Define relevant risk

A: For investors, risks are classified into the following two types: Systematic risk/relevant…

Q: Define diversifiable risk

A: Diversifiable risk It is special to a given business or industry. Regularly known in the feeling of…

Q: What is the criticism for using SMB and HML as risk factors?

A: The Fama and French Three-Factor Model (or Fama French Model for short) is an asset pricing model…

Q: quantitative risk analysis:

A: Quantitative risk analysis assess the risk associated with a particular monetary item.

Q: What is risk and give examples

A: While making investment decisions risk and return should be taken into consideration.

Q: Define control risk and detection risk. What is the difference between control risk and detection…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: What is the difference between systematic risk and unsystematic risk? Give an example of each.

A: Risk: The possibility that the actual outcome in a situation will differ from the expected outcome…

Q: Explain political risk

A: Political risks are important to be considered because they have an impact on the profitability…

Q: An introduction write up for a risk management.

A: What exactly is risk management?"Risk management" assists an organization in identifying,…

Q: What controls would you implement to

A: Internal Control system: Internal control system can be defined as the set of policies and…

Q: What do "threat," "vulnerability," and "risk" really mean?

A: Threat : A declaration of purpose to cause someone pain, harm, damage, or other hostile action as…

Q: How are total risk, nondiversifiable risk, and diversifiable risk related? Why is nondiversifiable…

A: Total risk is measured by the standard deviation of returns; it has two elements non-diversifiable…

Q: What is the purpose of NPV analysis? Be sure to discuss the concepts of risk and return in your

A: Net present value NPV is used quite extensively in capital budgeting decisions whether to accept or…

Q: Define the term risk?

A: Types of risk: Investment risk Market risk Inflation risk Business risk Liquidity risk

Q: Why is identification of risks, through a listing of assets and their vulnerabilities, so important…

A: Answer: One can never underestimate the importance of risk management that he is engaged in a…

Q: What is shared risk? Use an example to explain the shared risk happen and who will involved?

A: Risk means the uncertainty of happening of an event. When the risk is higher than the uncertainty of…

Q: List and define the different major categories of risk events

A: Risk can be defined as the variability of returns. When the variability of the return is high, in…

Q: hat are the primary tasks and Education, Training, & Certification, the primary industries of a risk…

A: Risk management is a broadly applicable business concept that is widely recognized as vital to an…

Q: Briefly explain the main purpose of Risk Governance Framework (RGF)

A: Every organisation maintains risk governance framework.It has certain objectives and purposes in…

Q: Explain relevant risk

A: Introduction: Risk can be characterised in terms of the uncertainty of future consequences resulting…

Q: We manage risk so we know which risks are worth taking.

A:

Q: Explain risk aversion

A: Introduction: Risk can be characterized in terms of the uncertainty of future consequences resulting…

Q: Describe some regulatory actions that have influenced theevolution of risk management.

A: Regulatory Actions are the actions that are substantive, i.e. required to meet the expectations.…

Q: Why is it important to be able to quantify risk?

A: Risk is the chance that an outcome of an investment's actual gain will differ from an expected…

Q: Define a risk event.

A: Risk Event:  When an event can cause losses to the company's stakeholders and investors due to…

Q: isk with practical example

A: Political risk Political risk is the risk an investment's returns could suffer as a result of…

Q: Provide one example of a calculation of risk and discuss its significance.

A: Risk is a chance that the actual gain or outcome from the investment will differ from the expected…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.