https://padlet.com/nurulsuhailah13/2x3crti37a4y Made with magic en-us 2018-10-19 12:36:58 UTC 2026-01-22 08:35:51 UTC hello@padlet.com nurulsuhailah13 https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/294785246 2018-10-19 12:40:13 UTC https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/294785246 i_tantzeewei https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/294861515 From a financial industry's perspective, risk is the potential loss of financial earnings and profits due to exposure to uncertainty. These uncertainties typically arises from an organisation’s exposure to financial markets, its transaction activities and its reliance on processes, people and systems. For example, when an investment is made, there are times where we are uncertain of whether interest rates associated to the investment will rise or drop, thus posing a risk of financial loss to the investment.]]> 2018-10-19 15:01:30 UTC https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/294861515 lovellegoh47 https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/295044442 Yes, they all have to be involved in the management of financial risk. This is because there are the three lines of defence which are lines of business, central risk function as well as corporate audit and compliance functions. Each of these lines of defence requires the different roles as for the lines of business, the front office is required and for the central risk function as well as the corporate audit and compliance functions, the supervising departments and board of directors are required respectively.]]> 2018-10-20 05:16:26 UTC https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/295044442 lovellegoh47 https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/295044745
a. Foreign exchange risk. It is when the value of an investment decrease due to currency exchange rate. For example a financial institution in Singapore deals with another financial institution in USA and there is a change in the USA currency exchange rate, it affects Singapore as well as other financial institutions around the world as the value would increase or decrease depending on the situation which may be positive or negative for the financial institutions. 
- Reputation risk
- Interest rate risk. interest rate might impact the price of the bonds
b. Credit risks. It is the risk of losses due to borrowers’ inability to meet its obligations. This is the greatest risk a bank face and is usually one which the most regulatory capital is required.  For example when customers are unable to pay, it affects the bank as they are unable to receive the funds required from the customers which may be needed elsewhere. Large part of bank revenue comes form loans when they default on their payment.]]> 2018-10-20 05:26:59 UTC https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/295044745 i_tantzeewei https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/295044960 Financial risks can arise from mergers and acquisitions through various ways. For example, if an investment is made on an unreliable merger and acquisition, there is a higher risk of that merger and acquisition not performing its services and failing to meet standards, thus leading to financial losses. Market risk can also arise from mergers and acquisitions transactions. For example, if the merger and acquisitions market is too competitive, companies investing in them may often close deals that are too expensive, making it unworthy of spending capital on mergers and acquisitions.]]> 2018-10-20 05:35:59 UTC https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/295044960 nurulsuhailah13 https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/295182928 Q4) Briefly explain the "Three Lines of Defence" Model in your own words. 

"Three Lines of Defence" Model illustrates how controls, processes and methods are assigned on organisations. The three line of defence are lines of business, central risk function and corporate audit and compliance functions. 

Line of business are responsible for day-to-day risk management by identifying, measuring and managing all risks within their scope of business. They prepare self-assessment reports that identify the status of risk issues. 
central risk function require a separation between risks taking business lines and risk supervising departments. The departments is responsible for the guidance and implementation of risk policies, for monitoring the proper execution that complies with documented risk policies. 
Corporate audit and compliance functions are where internal and external auditors provide an independent reviews of the effectiveness and compliance to risk policies of the risk processes to the senior committee. ]]> 2018-10-21 14:18:54 UTC https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/295182928 nurulsuhailah13 https://padlet.com/nurulsuhailah13/2x3crti37a4y/wish/295183639 Q6) Briefly explain and elaborate the process of risk management. 

1. Identify and prioritize key financial risks faced by an organization. They need to examine organisation and its products with competitors. For example, the competition for suppliers would be to maintain their position in the industry. Need to prioritize to be more efficient by focusing on risks that are critical to the company. 
2. Determine an appropriate level of risk tolerance with stakeholders and business objectives. Important to determine risk tolerance to know your limits so that you don't overuse your resources.
3. Implement risk management strategy in accordance with policy. For example, the change where and how business is done to reduce exposure and risk. How to deal with the respective risks. strategies u need to do to overcome those risks.
4. Measure, report, monitor and refine strategies. By measuring and reporting risks provides relevant information to management. They need to monitor the requirement or condition changes such as business environment and international political situation. They need to refine strategies to reflect changing expectations about market conditions. Need to measure a risk so that to know how much risk you are facing. to measure is to determine whether the strategy works for the risk the company is faced with. Need to report to risk managers and see the recommendations of them.  Refine to risk managers, directors

The most crucial step is measuring and monitoring risks. where u can improve on the strategies to manage the risks.


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