Risk Avoidance – NBC Institute

CSME – May 2022 – L2 – SC – Q5 – Risk Management and Corporate Strategy

Advise on investment strategies to minimize risks and explain factors determining risk appetite.

Question

a. A friend of yours who recently lost his job came to you for advice on how to invest his life savings in a way that will minimize the risk of loss of capital.

i. Advise him on how risk of losses could be minimized using the following:
1. Risk Diversification (1 Mark)
2. Risk Transfer (1 Mark)
3. Risk Sharing (1 Mark)
4. Risk Hedging (1 Mark)
5. Risk Avoidance (1 Mark)
ii. Explain to your friend when risk diversification is the best option for him. (4 Marks)

b. What is risk appetite? Explain THREE factors that determine the risk appetite of a company. (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Risk Avoidance, Risk Diversification, Risk Hedging, Risk Sharing, Risk Transfer
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: MAY 2022

Question Tag: Risk Avoidance

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CSME – May 2022 – L2 – SC – Q5 – Risk Management and Corporate Strategy

Advise on investment strategies to minimize risks and explain factors determining risk appetite.

CSME – May 2022 – L2 – SC – Q5 – Risk Management and Corporate Strategy

Advise on investment strategies to minimize risks and explain factors determining risk appetite.

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Advise on investment strategies to minimize risks and explain factors determining risk appetite.

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Advise on investment strategies to minimize risks and explain factors determining risk appetite.

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