Learning Activity 2_ Attempt review

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Kaplan Business School *

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Course

FNS50322

Subject

Finance

Date

Jan 9, 2024

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pdf

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7

Uploaded by MateNarwhalMaster978

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15/11/2023, 14:48 Learning Activity 2: Attempt review https://financeinstitute.ecampusv2.com.au/mod/quiz/review.php?attempt=238476&cmid=3743 1/7 Started on Wednesday, 15 November 2023, 3:50 PM State Finished Completed on Wednesday, 15 November 2023, 4:48 PM Time taken 58 mins 25 secs Grade 21.50 out of 22.00 ( 97.73 %) Question 1 Correct Mark 2.00 out of 2.00 Match the topics in the first column with the correct descriptions in the second column below (2 marks) The amount of risk that an entity is willing to accept, or retain in order to achieve its objectives Using risk appetite on a more micro level to set acceptable levels of variation around risk appetite. The chance of something happening that will have an impact on an individual’s or a business’s objectives. Risk capacity relates to the amount an organisation is capable of losing before it endangers its own sustainability. The guiding principles an organisation uses in relation to its management of risk and the detail of how these principles will operate in practice. The policies, systems and controls through which an organisation can establish, set risk limits and monitor its risk appetite One of the risk assessment tools that a lender may use to establish the probability of a borrower defaulting The threat that a risk poses after considering the current mitigation activities in place to address it A tool often graphically representing Likelihood and Impact, that can help companies identify and prioritise the risks associated with their business Risk Appetite Risk Tolerance Risk Risk Capacity Risk Management Risk Appetite Framework Credit Risk Analysis Residual Risk Risk Map Your answer is correct.
15/11/2023, 14:48 Learning Activity 2: Attempt review https://financeinstitute.ecampusv2.com.au/mod/quiz/review.php?attempt=238476&cmid=3743 2/7 Question 2 Correct Mark 1.00 out of 1.00 Question 3 Correct Mark 1.00 out of 1.00 Question 4 Partially correct Mark 0.50 out of 1.00 A lender receives a loan application from a business owner. The lender may seek to mitigate their risk exposure through one or more techniques. Which would not be one of those? a. Using the borrower's property as collateral b. Insisting on third party guarantees c. Using each principal in the business as a guarantor d. Request that the business segregate their assets before loan approval e. Requiring a loan covenant f. Request weekly DSCR reports from the borrower A licensed broker is required to report significant issues and incidents according to organisational policies and procedures. If a broker has identified a significant compliance breach by one of his credit representatives, how would he report this? a. Complete ASIC’s Reportable Situation Form b. Notify the Australian Financial Complaints Authority Free, as the ombudsman’s role is to investigate and resolve issues c. A significant compliance breach will be dealt with by The Australian Prudential Regulation Authority (APRA) as they are an independent statutory authority that supervises institutions across banking d. Complete a Breach Report and lodge with the industry body with whom the credit representative is registered A negative consequence of a risk occurring, with impact on stakeholders or assets, would be unlikely to include which 2 of the following: a. Environmental damage b. Decline in profits c. Increase in regulator scrutiny d. A competitor leaving the market e. Increase in clients seeking high LVR loans f. Implementation of increased risk controls
15/11/2023, 14:48 Learning Activity 2: Attempt review https://financeinstitute.ecampusv2.com.au/mod/quiz/review.php?attempt=238476&cmid=3743 3/7 Question 5 Correct Mark 1.00 out of 1.00 Question 6 Correct Mark 1.00 out of 1.00 Question 7 Correct Mark 1.00 out of 1.00 Credit Risk and the probability of a default is one of the main risks for lenders. What is one of the risk assessment tools that a lender may use to establish that probability. a. A Credit Risk Analysis b. Increase to LMI premiums c. A Physical Risk Analysis d. Using a Credit Analyst as a contractor for difficult borrowers e. Inviting all stakeholders to annual meetings From a lender’s point of view, a default is said to occur when a. A borrower is unable to meet their loan repayment obligations b. A business borrower has consistently met their loan repayment obligations c. An individual borrower is able to meet their loan repayment obligations. d. The lender projects the borrower’s risk of repayment obligations for the next 5 years e. When the credit exposure of a loan is transferred to a second party Not all identified risks will require intervention. Some risks will just require timed review and monitoring. For an established business, which of the following would be considered the highest risk in relation to potential competitors who may enter their market and produce a competitive product? a. A market with no barriers to entrance and very low product costs b. A market with low start-up costs for market launching and easy access to markets c. High start-up costs and limited access to markets d. High barriers to entering the market
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