Adopting an Enterprise Risk Management Approach by an FI Is

question 95

Multiple Choice

Adopting an enterprise risk management approach by an FI is likely to result in all of the following EXCEPT

• A)prioritizing each risk and managing them as a portfolio of risks.
• B)recognizing that risk-taking is rooted in subtle behavioral characteristics.
• C)larger investments in risk management processes and systems.
• D)encouraging a culture of risk awareness and decisions throughout the organization.
• E)realignment of the stature and resources provided to risk management functions within the FI.

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Definitions:

Risk-Free Asset

A financial investment that promises a certain return without any chance of monetary loss.

Portfolio

An assortment of financial assets owned by a person or an organization.

Beta

A criterion for the volatility, or established risk, inherent in a security or portfolio ensemble in the context of the broader market.

Portfolio

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs.