Chapter_1 Enterprise Risk Management

Risk Can be Define as__________ and Severity of The Event and Undesired Consequences of an__________

• Doubt, Action

• Uncertainties, Activity

• Susicion, Act

• Severity, Event

The Following is The External Factors Exposing Banks to Risk EXCEPT?

• Changes in Banking Regulation

• Goverment's Monetary and Fiscal Policy

• Political System

• Bank's Effficiency

Bank's Exposure to Risk Stem from Their Unique Position as Financial Intermediaries Between_______and______ in The Economic System.

• Borrower, Creditor

• Customer, Depositor

• Fund Provider, Fund User

• Banker, Stakeholder

THE NATURE OF RISK FOR BANKING INSTITUTIONS CAN BE CATEGORIZED INTO TWO TYPES:

• Systematic risk and unsystematic risk

• Financial risks and non-financial risks

• Risk appetite and risk tolerance

• Credit risk and liquidity risk

Financial risk is refer to______

• The risk of failure of one bank due to the failure of another banks or a group of banks fail due to contagion effect.

• Total risk comprises systematic risk and unsystematic risk as postulated by capital asset pricing model.

• Risks originating from banking activities such as credit risk from lending activities, liquidity risk from the bank’s inability to meet claims and immediate obligations due to liquidity constraints.

• Types of risks which are within the control of the banks to manage

Risk appetite refers to ____ or ____ of risk a bank is willing to take in order to meet its strategic objectives

• amount, level

• amount, percentage

• tolerance, type

• tolerance, level

Which of the following answer is NOT refer to Risk Management Process (ISO31000,2018)?

• Establishing the context

• Risk identification

• Risk analysis

• Risk transfer

Operational risk, reputation risk and Shariah risk are classified under____

• Financial risks

• Non-financial risk

• Systemic risk

• Unsystematic risk

Which of the following statements refer to Enterprise Risk Management?

• Applicable to financial risk and accidental risk because they are transferable risks

• Risk Averse

• Occurs within one business department

• An integrated approach with a holistic view

The following statements is TRUE about the benefit of ERM EXCEPT?

• ERM provides the overall view of the risks involved promotes accountable risk management process.

• ERM allows better communication, monitoring and control with the engagement of the board of directors, top management, and various risk committees at production level.

• ERM can reduced risks arising from information asymmetry in operational level.

• ERM offers a good check and balance systems to ensure the quality of the bank’s assets are protected.