Practice Questions Week 3.pdf - BFF5902 Introduction to Risk Principles Practice Questions Week 3(not assessed Question 1 Critique the following

Practice Questions Week 3.pdf - BFF5902 Introduction to...

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BFF5902 Introduction to Risk Principles Practice Questions Week 3 (not assessed) Question 1 Critique the following statement: “Risk appetite is set by the Board and reflects the chairman’s personal risk preferences.” In discussing, please explain the purpose of contextualizing the firm before completing a risk appetite statement and what is meant by a “balanced” approach. Discuss the meaning and purpose of the terms “Risk Profile”, “Risk Capacity” and “Risk Tolerance”. How are these concepts used to control risk- taking behavior? Question 2 Critique the following statement: “A successful risk appetite framework will encourage firms to have the courage of their risk convictions, because the firm’s Board only needs to
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