WorksheetsTopic 6: Risk management
Total questions: 9
Worksheet time: 4mins
Credit risk management tools include ________.
deductibles
collateral
interest rate swaps
duration analysis
Risk in economics and finance can be classified in various ways. One way is to distinguish between ______ and _____.
Financial risk and non-financial risk
Buisness risk and market risk
Risk outcomes and business risk
Business risk and financial risk
Business risk can be defined as _________.
Uncertainty arising from possible losses in financial markets due to movement of financial variables
Uncertainty arising from the nature of a firm’s business
Usually associated with the risk that obligations and liabilities cannot be met by current assets
Subjective risk cannot be quantified
The following are risk management techniques, EXCEPT:
Avoid
Control
Reduce
Transfer
Market risk are systematic risk that arise from macro source or unsystematic risks that are asset or instrument-specific.
TRUE
FALSE
What are the main objective of financial institutions in regard to risk management?
To maximise profit and shareholder value by providing different financial services mainly by managing risks.
To understand the risk or return trade-off.
To utilising financial products to hedge against risk (such as using options, futures, insurance).
To have proper valuation methodologies to assess quality of investments and determine the allocations and expected returns.
_________ envisage overall objectives and ensure the implementation of risk management in Islamic financial institutions.
Management
Risk management department
Board of director
Internal audit
Which of the following is the element refers to the managing of liquidity risk?
Appropriate valuation techniques
Dependency on current accounts and IAH, gapping method, cash flow forecasting
Periodic reviews evaluating internal controls such as Shariah audit
Maturity ladders, the IAHs’ expectations
