Which Risk Assessment Method Removes Human Discretion and Relies on a Fixed

question 18

Multiple Choice

Which risk assessment method removes human discretion and relies on a fixed and explicit set of predetermined rules to make the final decision about risk?

• A) Actuarial
• B) Anamnestic
• C) Structured professional judgment
• D) Unstructured professional judgment
• E) None of the above

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Definitions:

Capital Balance

Represents the amount of capital contributed by investors or owners, plus retained earnings minus any distributions or withdrawals.

Interest

The cost paid for borrowing money, typically expressed as a percentage rate over the period of borrowing.

Profit Distribution

The process of allocating a company's profits among its shareholders, typically in the form of dividends.

Withdrawals

Withdrawals refer to the act of taking out cash or assets from a business by its owners for personal use, impacting the owner's equity.