The Concept of Enterprise Risk Management Encourages FIs to Manage

question 85

True/False

The concept of enterprise risk management encourages FIs to manage all of the risks to which they are exposed as a portfolio, rather than managing each risk individually.

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Definitions:

Authority

The power or right to make decisions, give orders, and enforce obedience.

Principal

The main party to a transaction, such as the owner of a business, or the amount of money loaned or invested, excluding interest or profits.

Power of Attorney

A legal document authorizing one person to act on another's behalf in legal or financial matters.

Equal Dignity Rule

A rule requiring that contracts that would normally fall under the statute of frauds and need a writing if negotiated by the principal must be in writing even if negotiated by an agent.