文档介绍：Jennifer Durant is evaluating the existing risk management system of Silverman Asset Management. She is asked to match t
Which of the following statements regarding risk and risk management is correct?
Risk management is more concerned with unexpected losses versus expected losses.
There is a relationship between the amount of risk taken and the size of the potential loss.
The final step of the risk management process involves developing a risk mitigation strategy.
If executed properly, the risk management process may allow for risk elimination within an economy.
Answer: A
Risk management is more concerned with the variability of losses, especially ones that could rise to unexpectedly high levels or ones that suddenly occur that were not anticipated (unexpected losses).
Which of the following statements regarding the role of the firm’s audit committee is most accurate?
At least one member of the audit committee must possess sufficient financial knowledge.
The audit committee may consist of some members of the management team.
The audit committee is only responsible for the accuracy of the financial statements.
The audit committee is meant to work dependently with management.
Answer: B
The audit committee consists primarily of non-management members but there may be some management members. (., chief financial officer). The audit committee could work with management members but should keep independent with them.
A board of directors is evaluating the implementation of a new ERM program at an asset management company. Which statement below is consistent across the various current definitions of an ERM program and most appropriate to be included in the company's ERM definition and goals?
The ERM program should reduce costs by transferring or insuring most of the company's major risk exposures.
The major goal of the new ERM program should be to reduce earnings volatility.
The ERM program should be managed separately from the opera