Question

Enterprise Risk Management (ERM) considers both pure risk and speculative risk.  Name two speculative financial risks that...

Enterprise Risk Management (ERM) considers both pure risk and speculative risk.  Name two speculative financial risks that the Chief Risk Officer (CRO) might want to manage.  How important are these risks to the firm?  

Homework Answers

Answer #1

Two speculativerisk the manager should be managing are-

A. Investment in to other company because the value of investment can either go up or other go down or same so there will be a speculative risk related to investment into other companies.

B. Taking exposure into the option contract is another example of speculative risk because option contract will be also having a large amount of speculation associated with the gain or the loss and they will be offering with the right not the obligation

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Answer both they are part of one question 42 a) One of the most important effects...
Answer both they are part of one question 42 a) One of the most important effects on a company as a result of using ERM is Select one: a. the appointment of a Chief Risk Officer b. a team member appointed in each unit of the firm who focuses on reporting risks to his/her supervisor c. increased risks in every category of risk but well-reported to senior management d. de-centralization of risk functions 42 b)A definition by Lam of an...
Identify two challenges in making risk management decisions. How can health care leaders overcome risks? What...
Identify two challenges in making risk management decisions. How can health care leaders overcome risks? What steps would you take to overcome the two challenges you identified? Explain your answers.
student name: When securing the modern enterprise, consider that IT systems do not operate alone. Securing...
student name: When securing the modern enterprise, consider that IT systems do not operate alone. Securing them involves securing their interfaces with other systems as well. It is important to know the different interconnections each system may have. Fill out the table below for four IT systems. Include the following: Note two enterprise systems they connect with and their connection type. Note two security vulnerabilities the connection may have and 2 to 4 ways each vulnerability could be potentially exploited....
Student name: When securing the modern enterprise, consider that IT systems do not operate alone. Securing...
Student name: When securing the modern enterprise, consider that IT systems do not operate alone. Securing them involves securing their interfaces with other systems as well. It is important to know the different interconnections each system may have. Fill out the table below for four IT systems. Include the following: Note two enterprise systems they connect with and their connection type. Note two security vulnerabilities the connection may have and 2 to 4 ways each vulnerability could be potentially exploited....
Please give examples for each risk domain in any healthcare organization. Domain Description Operational The business...
Please give examples for each risk domain in any healthcare organization. Domain Description Operational The business of healthcare is the delivery of care that is safe, timely, effective, efficient, and patientcentered within diverse populations. Operational risks relate to those risks resulting from inadequate or failed internal processes, people, or systems that affect business operations. Included are risks related to: adverse event management, credentialing and staffing, documentation, chain of command, and deviation from practice. Clinical / Patient Safety Risks associated with...
Question 3 Consider two projects, A and B, associated with the following expected cash flow sequences...
Question 3 Consider two projects, A and B, associated with the following expected cash flow sequences Year Project A Project B 0 -950 -950 1 400 240 2 400 240 3 450 240 4 0 240 5 0 240 6 0 240 You are acting as the Chief Financial Officer of a firm. Suppose you face a capital rationing constraint such that you have a limit of 950 currency units in your budget. Your firm’s weighted average cost of capital...
In May of this​ year, Newcastle Mfg.​ Company's capital investment review committee received two major investment...
In May of this​ year, Newcastle Mfg.​ Company's capital investment review committee received two major investment proposals. One of the proposals was put forth by the​ firm's domestic manufacturing​ division, and the other came from the​ firm's distribution company. Both proposals promise a return on invested capital to approximately 15 percent. In the​ past, Newcastle has used a single​ firm-wide cost of capital to evaluate new investments. ​However, managers have long recognized that the manufacturing division is significantly more risky...
n May of this year Newcastle Mfg. Company's capital investment review committee received two major investment...
n May of this year Newcastle Mfg. Company's capital investment review committee received two major investment proposals. One of the proposals was put forth by the firm's domestic manufacturing division, and the other came from the firm's distribution company. Both proposals promise internal rates of return equal to approximately 16 percent. In the past, Newcastle has used a single firm wide cost of capital to evaluate new investments. However, managers have long recognized that the manufacturing division is significantly more...
Reputation risk can be viewed as a “meta” risk – the risk of risk itself.    Alternately,...
Reputation risk can be viewed as a “meta” risk – the risk of risk itself.    Alternately, one chief risk officer (CRO) defined it as “the by-product of all other risks.”    As a by-product or second-order risk, it amplifies the ill effects of primary risk events, such as   bad management, ethics violations, or a catastrophe. According to Reputation Review 2012, a report from Oxford Metrica sponsored by Aon P.L.C., a public company runs an 80% chance of suffering a reputational risk...
"Risk' can be best defined as on the of the followings:   a. Variability of returns and...
"Risk' can be best defined as on the of the followings:   a. Variability of returns and probability of financial loss b. Chance of financial loss   c. Variability of returns   d. Correlation of relationship among two variables Which of the following statement is NOT TRUE when we argue that the idea of riskless arbitrage is to accumulate the portfolio with following conditions : a. Requires no net wealth invested initially   b. Invest in the long-term securities only where risk will be...