Which ERM Component Is Comprised of Policies and Procedures Established

question 8

Multiple Choice

Which ERM component is comprised of policies and procedures established and implemented to ensure risk responses are effective?

• A)Risk assessment
• B)Control activities
• C)Information and communication
• D)Objective setting

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Definitions:

Debt

An amount of money borrowed by one party from another, to be repaid with interest.

M&M Proposition II

A theory in corporate finance that asserts the cost of equity is a linear function of the company's debt/equity ratio, under the assumption of no taxes and financial distress costs.

Cost of Equity Capital

The return required by equity investors as compensation for their investment risk.