Financial risk management encompasses the management of (a)   operational risk, strategic risk, and credit risk (b)   credit risk, market risk, and liquidity risk (c)   compliance risk, credit risk, and strategic risk (d)   pure risk, speculative risk, and strategic risk

Q: Describe Asset/Liability Models and explain why it is better than Value-at-Risk Models for Portfolio…

A: The process through the use of assets and liabilities are managed in such a way that the risk of…

Q: Distinguish between different kinds of risk and the steps involved in the financial risk management…

A: The financial risk management process is the process that describes the framework for the…

Q: Describe the responsibili!es of a financial analyst

A: Financial Analyst: Someone whose job is to evaluate the financial state of a firm or asset in order…

Q: ) Explain liquid asset management as it relates to a financial institu

A: As per company policy, it s only possible to solve the first part.

Q: Evaluate the two strategies adopted by financial institution to manage their risks.

A: Note: As you asked to provide the solution of part iii), we are providing the solution of part iii)…

Q: The finance function is primarily interested in the relationship between the risks of investments…

A: As per the guidelines, only one question is allowed to be solved. please resubmit the question…

Q: Distinguish between business and financial risk

A: Financial risk refers to the ability of a company to handle its debt and financial leverage, while…

Q: Define financial intermediary

A: A financial intermediary is a firm that goes about as an agent in a money related exchange between…

Q: Tabulate and explain each drivers that affect the financial market and identify the risks that may…

A: Here it involves the competitiveness and market behavior which can be create more impact in the…

Q: Define corporate risk

A: Corporate risk is the risk related to the company’s normal course of activities. The corporate…

Q: Differentiate between interest rate risk and reinvestmentrate risk.

A: The major representation of the interest rate risk is the differentiation in the bond market price…

Q: Which is risk in the context of financial decision making and performance? Does performance…

A: Risk in the perspective of financial decision making and performance differs as the company faces…

Q: Explain factors that encourage high-quality financial reporting.

A: A conceptual framework can be defined as a system of ideas and objectives that lead to the creation…

Q: which of the following headings best describes and measures gearing : a- financial position (risk)…

A: Gearing ratio is a financial ratio which compares equity of a company to its debt. Gearing ratio =…

Q: Credit analysts are likely to consider which of the following in making a rating recommendation?A .…

A: Credit analysts are professionals who are appointed by credit rating agencies or any investment…

Q: Differentiate between forecast and projection in relation to prospective financial information

A: Referred to as PFI, the Prospective Financial Information explains that the financial information…

Q: Discussion questions: What are the basic risks faced by financial intermediaries? Discuss each…

A: Financial intermediaries : Financial intermediaries can be described as institutions that act as the…

Q: Define and explain the agency problem in terms of differences in ability to diversify risk by…

A: Agency problem occurs when there is a conflict of interest when manager is in dilemma to serve the…

Q: Market risk is referred to as: systematic risk. total risk. diversifiable risk. asset specific…

A: Market risk is the type of risk that affects the whole market. Market risk is not specific to a…

Q: financial risk management amswer question d only

A: Data given:: Future Market - Buys March KLSE CI contracts at 1158 Sells March KLSE CI contracts at…

Q: When it comes to NAS and IFRS financial statements, what are the aims, concepts, and assumptions…

A: Introduction: A conceptual framework is a set of ideas and objectives that lead to creating a set of…

Q: Describe relationship between risk and profitability.

A: Risk and profitability have direct relation. Lower the risk, lower is the return and Higher the…

Q: Examine how to examine the efficiency of internal controls in finance and the investment cycle by…

A: An audit's techniques for testing the operational efficacy of internal controls limit the risk of…

Q: Identify significant accounts and relevantassertions related to the finance andinvestment cycle.

A: Management Assertion:   Management assertion refers to the claims made by the management assuring…

Q: Implications of the business risk approach?

A: Business risk is the exposure a company or organization has to factor(s) that will lower its profits…

Q: What is risk? Why must risk as well as return be considered by the financial manager who is…

A: Risk is associated with every business it is one of the important functions of the management to…

Q: What is a financial risk management certificate?

A: Financial risk management course refers to the professional qualification which focus provides the…

Q: Management of current liabilities arises, in part, because of a concern over a.  (profitability).…

A: Current liabilities are obligations on an entity that are to be compensated by the organization…

Q: what are the benefit to the financial institution and their consumers of measuring or mitigating…

A: A strategy for planning for and decreasing the impact of hazards on an organisation is risk…

Q: Answer the following questions: a) How do you handle financial risk?

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Explain fundamental qualitative character tics of financial reporting.

A:

Q: Is externally reported financial information always preciseand accurate?

A: Financial Accounting:   It refers to the process of recording the financial transactions of the…

Q: What are some determinants of business risk?

A: Business risk is referred as the exposure of risk factors towards a company or a business which…

Q: escribes the relationship between risk and return.

A: Risk and return are directly related.

Q: Describe the three important functions of the financial system, namely: a. Risk sharing; b.…

A: Introduction Financial system: Financial system is the system which consists of financial services…

Q: financial assets and tradable securities

A: This question tells about financial assets and tradable securities

Q: List and describe thedifferent types of financial intermediaries

A: Step 1: Introduction Financial Intermediary: An entity that acts as a link between the lender and…

Q: Briefly describe the meaning of financial risks and its major types

A: Risk can be described as the likelihood of an unexpected or negative outcome. Any act or activity…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.