PrepQuestions-Topic2-Fall2011

PrepQuestions-Topic2-Fall2011 - pre and post loss goals for...

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Prep Questions Topic 2 The Risk Management Process Identification of Exposures to Lass Fall 2011 I would strongly advise that you prepare these questions. Do not hand these in as part of your homework.  R ISK  M ANAGEMENT  B ENEFITS     Consider the benefits of risk management (properly managing risk).  Properly managing risk reduces its  negative financial consequences and thereby benefits individuals, organizations and society. P1.  As a review, what are the three components of the  financial consequences of risk ? P2.  Discuss the tradeoff between the ‘ cost of risk managemen t’ and the ‘ value (benefit) ’ created by a  corresponding reduction in risk. P3.  Distinguish between the ‘ cost of risk management ’ vs. the ‘ benefits of risk management ’.   P4.  What is an ‘ efficient ’ risk management program in this context? R ISK  M ANAGEMENT  P ROCESS     P1.  Identify and briefly discuss both 
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Unformatted text preview: pre and post loss goals for risk management programs. P2. One of the steps in the risk management process involves Selecting Appropriate Risk Management Techniques. In order to do this, firms will have certain criteria or objectives in mind. Discuss how financial as well as non-financial considerations play a role in this process. Give examples where appropriate. P3. One step in the risk management process is Monitoring Results and Revising the Risk Management Program. What steps are involved in the process? Be sure you have a full understanding of different types of standards of performance and how this relates to this step in the process. P4. Make sure you have a good understanding of the loss exposure identification techniques that are mentioned in Chapter 2 and discussed in Chapter 4....
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