Topic 9 Risk Management Failures.pdf

The role of risk management does not involve

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The role of risk management does not involve performing which of the following tasks? Communicate all risks to risk-taking decision makers. Monitor and manage all risks. Make sure the firm takes greater than the necessary amount of risk in order to achieve higher returns. Assess all risks faced by the firm. Which of the following statements does not illustrate how firms can fail to correctly monitor and manage risk on an ongoing basis? Some securities have complex relationships with market variables such as interest rate changes. Portfolio risk profiles do not change over time. A firm does not have an adequate incentive structure. A firm does not have an adequate culture that promotes effective risk management.
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Question #7 of 7 Question ID: 438698 A) B) C) D) Predatory trading occurs when: a firm with small loss in a given market can influence the activity in that market. a borrower becomes worse off after a loan than before. other firms in a market see that a large player in the market is in trouble and the other firms attempt to push the price down further in order to hurt the large player. there is a misrepresentation in the mortgage application from the borrower side.
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  • Fall '18
  • risk management process

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