Question

READ AND FOLLOW INSTRUCTIONS STRICTLY:

1.        Write an essay not more than 5(five) pages;

2.        Line spacing: 1.5, font type: Times new romans; font size: 12;

3.        Cite appropriate references for all definitions, and quotations;

4.        Align your essay by justifying the whole document;

5.        Avoid bullet points/numbering in the essay but focus on discussing ideas

and avoid use of tables;

6.        Provide not less than 5 (five) references excluding Wikipedia and lecture

notes.

7.        Deadline: 15 September 2018 – No Late submissions will be accepted.

NOTE THAT THIS IS THE DATE BY WHICH ASSIGNMENT MUST BE RECEIVED

8.        ESSAYS SHOULD NOT BE SUBMITTED BY EMAIL OR SOFT COPIES

Task:

Write an essay to discuss the relevance of the various elements of a risk management system and how they interact to effectively manage risks in an organisation.

READ AND FOLLOW INSTRUCTIONS STRICTLY:

1.        Write an essay not more than 5(five) pages;

2.        Line spacing: 1.5, font type: Times new romans; font size: 12;

3.        Cite appropriate references for all definitions, and quotations;

4.        Align your essay by justifying the whole document;

5.        Avoid bullet points/numbering in the essay but focus on discussing ideas

and avoid use of tables;

6.        Provide not less than 5 (five) references excluding Wikipedia and lecture

notes.

7.        Deadline: 15 September 2018 – No Late submissions will be accepted.

NOTE THAT THIS IS THE DATE BY WHICH ASSIGNMENT MUST BE RECEIVED

8.        ESSAYS SHOULD NOT BE SUBMITTED BY EMAIL OR SOFT COPIES

Task:

Write an essay to discuss the relevance of the various elements of a risk management system and how they interact to effectively manage risks in an organisation.

READ AND FOLLOW INSTRUCTIONS STRICTLY:

1.        Write an essay not more than 5(five) pages;

2.        Line spacing: 1.5, font type: Times new romans; font size: 12;

3.        Cite appropriate references for all definitions, and quotations;

4.        Align your essay by justifying the whole document;

5.        Avoid bullet points/numbering in the essay but focus on discussing ideas

and avoid use of tables;

6.        Provide not less than 5 (five) references excluding Wikipedia and lecture

notes.

7.        Deadline: 15 September 2018 – No Late submissions will be accepted.

NOTE THAT THIS IS THE DATE BY WHICH ASSIGNMENT MUST BE RECEIVED

8.        ESSAYS SHOULD NOT BE SUBMITTED BY EMAIL OR SOFT COPIES

Task:

Write an essay to discuss the relevance of the various elements of a risk management system and how they interact to effectively manage risks in an organisation.

READ AND FOLLOW INSTRUCTIONS STRICTLY:

1.        Write an essay not more than 5(five) pages;

2.        Line spacing: 1.5, font type: Times new romans; font size: 12;

3.        Cite appropriate references for all definitions, and quotations;

4.        Align your essay by justifying the whole document;

5.        Avoid bullet points/numbering in the essay but focus on discussing ideas

and avoid use of tables;

6.        Provide not less than 5 (five) references excluding Wikipedia and lecture

notes.

7.        Deadline: 15 September 2018 – No Late submissions will be accepted.

NOTE THAT THIS IS THE DATE BY WHICH ASSIGNMENT MUST BE RECEIVED

8.        ESSAYS SHOULD NOT BE SUBMITTED BY EMAIL OR SOFT COPIES

Task:

Write an essay to discuss the relevance of the various elements of a risk management system and how they interact to effectively manage risks in an organisation.

READ AND FOLLOW INSTRUCTIONS STRICTLY:

1.        Write an essay not more than 5(five) pages;

2.        Line spacing: 1.5, font type: Times new romans; font size: 12;

3.        Cite appropriate references for all definitions, and quotations;

4.        Align your essay by justifying the whole document;

5.        Avoid bullet points/numbering in the essay but focus on discussing ideas

and avoid use of tables;

6.        Provide not less than 5 (five) references excluding Wikipedia and lecture

notes.

7.        Deadline: 15 September 2018 – No Late submissions will be accepted.

NOTE THAT THIS IS THE DATE BY WHICH ASSIGNMENT MUST BE RECEIVED

8.        ESSAYS SHOULD NOT BE SUBMITTED BY EMAIL OR SOFT COPIES

Task:

Write an essay to discuss the relevance of the various elements of a risk management system and how they interact to effectively manage risks in an organisation.

Task:

Write an essay to discuss the relevance of the various elements of a risk management system and how they interact to effectively manage risks in an organisation.

Answer 1

Risk management system

What ever be the reason but every one expose himself to some kind of risk but it varies from person to person how they manage it. some persons bear more risk and some persons bear low risk

Risk is a phenomenon that the outcome may be different from what is expected

The two patamparam of risk are uncertainty about the outcome and utilities of outcome.

Risk can be defined as an abstract concept expressing the possibility of unwanted outcomes _ Tom Gilb

Amount of risk to be handled by an investor is his biggest decision

Risk management is any activity which defines the risk and provide preventive measures .due to dynamic nature of business environment risk management system has become very necessary. Globalisation results in new market , competitors and products and development of technology has influenced the pace of business and volatility of financial markets which leads to restructured markets.

The changes in flow of funds worldwide lead to volatility of financial markets and collapse of fixed foreign exchange rates.

Unpredictable changes in interest rates, exchange rates, prices have made the financial environment risky and that is why the managerial personnel need to seriously consider whether risk management system has been properly applied.

The global goal of organisations is risk is equal to return. Executives are taking measures to manage risk and for that they employ comprehensive and integrated risk management strategies.

Each organisations faces unique set of problems and hence should apply the suitable risk management framework.

Organisations are now concerned with the problems faced by any firm whose performance is affected by international environment. The companies which are performing domestically but affected by international developments. For example exchange rates can influence a domestic market

It difficult to find a firm not affected by international environment

How to consider risk in a business environment

It has been observed that international diversification is more effective than domestic diversification because it reduces the environment risk

The political instability and unfavorable government can seriously endanger the very existence of the multi national companies. Hence it is advisable to assess the political instability and risk of that country in which investment is proposed to be made if the assessment reveals that political risk is high the company may decide not to invest even if very high returns are expected to be made and vice versa.

There are various kinds of risks

Business risk

On a micro level business risk involved the variability in earnings due to variation in cash inflows and outflows of capital investment projects undertaken. This risk apsa known as investment risk materialize because of forecasting errors made in market acceptance of products, future technology changes and changes in costs related to projects

On an aggregated basis variability in earnings may detide from the degree of efficient diversification that the firm has achieved in its operations and it's overall portfolio of assets the firm can reduce this risk also referred to as portfolio risk by seeking out capital projects and merger candidate that have a low or negative correlation with its present operations.

Credit risk

Country risk

This is the possibility for an investor to experience losses arising from investment in securities issued by foreign countries due to change in forex rates or due to expropriation actions by the host government s.

Financial risk

It is the potential loss or danger due to the uncertainty in movement of foreign exchange rates , interest rates, credit quality, liquidity position, investment price , commodity prices or equity prices as well as the unpredictability of sales price growth and financing capabilities.

Interest rate risk

Liquidity Risk

Market price risk

Reinvestment risk

This is the risk associated with the possibility of having lower return on earnings when maturing funds or the interest earnings of funds are reinvested.