CAS ERM

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Esaie
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26155
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CAS ERM
Updated:
2010-07-09 13:25:38
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Exam6
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  1. Types of Risk
    • 1. Hazard
    • 2. Financial
    • 3. Operational
    • 4. Strategic
  2. Hazard Risk
    • 1. Physical and natural hazard risks
    • 2. Examples include
    • a) Fire
    • b) Windstorm
    • c) Theft
    • d) Business interruption
    • e) Disease and disability
    • f) Liability claims (e.g., slip-and-fall, product recall)
  3. Financial Risk
    • 1. Risk due to changes in fi nancial conditions and fi nancial markets
    • 2.Examples include
    • a) Price (e.g., asset value, interest rate, foreign exchange, commodity)
    • b) Liquidity (e.g., cash flow, call risk, opportunity cost)
    • c) Credit (e.g., default, downgrade)
    • d) Inflation / purchasing power
  4. Operational Risk
    • 1. Risk due to operating business
    • 2. Examples include
    • a) Business operations (e.g., HR, product development, capacity, efficiency, business cycle)
    • b) Empowerment (e.g., leadership, change readiness)
    • c) Information technology
    • d) Business reporting (e.g., budgeting and planning, accounting info, taxation)
  5. Strategic Risk
    • 1. Risk to changes in demand and prices
    • 2. Examples include
    • a) Reputational damage (e.g., trademark/brand erosion,fraud)
    • b) Competition
    • c) Customer wants
    • d) Social/cultural trends
    • e) Technological innovation
    • f) Capital availability
    • g) Regulatory and political trends
  6. Operational Risk
    • 1. Risk due to operating business
    • 2. Examples include
    • a) Business operations (e.g., HR, product development,capacity, efficiency, business cycle)
    • b) Empowerment (e.g., leadership, change readiness)
    • c) Information technology
    • d) Business reporting (e.g., budgeting and planning, accounting info, taxation)
  7. 7 Process Steps of ERM
    • 1. Establish Context
    • 2. Identify Risks
    • 3. Analyze/Quantify Risk
    • 4. Integrate Risks
    • 5. Assess/Prioritize Risks
    • 6. Treat/Exploit Risks
    • 7. Monitor & Review
  8. 3 Categories of Risk Modeling Methods
    • Methods based on
    • 1. Analysis of historical data
    • 2. Combination of analysis of historical data and expert input
    • 3. Expert input
  9. Risk Modeling Methods Based On Analysis of Historical Data
    • 1. Empirical Distributions
    • 2. Fit Parameters of Theoretical Probability Density Function
    • 3. Stochastic Diff erential Equations (SDE)
    • 4. Extreme Value Theory
    • 5. Regression
  10. Risk Modeling Methods Based On Combination of Analysis of Historical Data and Expert Input
    • 1. System Dynamics Simulation
    • 2. Fuzzy logic
  11. Risk Modeling Methods Based On Expert Input
    • 1. Preference among bets
    • 2. Judgments of relative likelihood
    • 3. Decomposition to aid probability assessment
    • 4. Delphi technique

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