Question

Answer both they are part of one question please

26 a) Which one of the following would be a benefit of an integrated approach to risk management?

Select one:
a. Integration insulates the firm from macroeconomic factors that may have negative impacts
b. Integration allows the firm to create objectives that address the oversight functions
c. It assumes that crisis management is unnecessary
d. Integration allows the risk manager a much easier job

26 b)Which one of the following is a criticism Lam makes of the silo-based approach to risk management?

Select one:
a. it is basically irresponsible in managing risk
b. It makes it impossible to quantify the aggregate exposure of the firm to risk
c. It invites mistakes in estimating severity and frequency
d. It relies on separate units in the company to address risks

Answer 1

a) Integrated risk management helps a firm's leaders to understand the risk, make decisions on how to mitigate risks if anything occurs and prevent major loss on operational and strategic goals. Therefore, the integrated risk management allows the firm to create objectives that address the oversight functions, and this implies that other options are not true.

b) In silo based approach to risk management is basically departmental based. This means that the firm is divided into departments, and risk management is performed on each department separately. The criticism is based on this because generally when the risks are accumulated, it doesnt meet the actual goal of the overall firm. Hence, It relies on separate units in the company to address risks is the criticism.