Topic 1 RM part 2

What is a risk profile?

• The maximum risk an organization can bear

• The willingness to take risks

• The subjective judgment of risk severity

• A set of risks that may affect an organization

Which term describes the willingness to take on a certain level of risk?

• Risk tolerance

• Risk appetite

• Risk capacity

• Risk acceptance

What does risk perception refer to?

• The subjective judgment regarding risk severity

• The chosen state of mind concerning uncertainties

• The decision to accept certain risks

• The maximum risk an organization can bear

What is risk acceptance?

• The maximum level of risk an organization can bear

• The willingness to take risks

• The subjective judgment of risk severity

• The decision to acknowledge and take on certain risks

Which of the following best describes risk capacity?

• The maximum level of risk an organization can bear

• The specific level of risk an organization is willing to accept

• The decision to acknowledge certain risks

• The willingness to take on risks

What is the difference between risk appetite and risk tolerance?

• They are the same concept

• Risk tolerance is broader than risk appetite

• Risk appetite refers to maximum risk only

• Risk appetite is broader than risk tolerance

Which type of financial institution is characterized by risk-sharing?

• Conventional Banks

• Islamic Financial Institutions

• Investment Banks

• Credit Unions

What is a key difference in risk management between IFIs and conventional banks?

• Conventional banks share risks

• IFIs use risk-shifting strategies

• Conventional banks avoid risk entirely

• IFIs do not face asset-liability mismatch

Who is the regulator of the financial sector in Malaysia?

• Bank Negara Malaysia

• Islamic Financial Services Board

• Basel Committee

• International Monetary Fund

What is the purpose of the Basel Committee on Banking Supervision?

• To manage risks in financial markets

• To provide loans to banks

• To set global standards for banking regulation

• To regulate Islamic finance