Describe Detection Risk.

Q: Explain what is meant by information risk, and give at least two (2) causes of this risk.

A: Information risk reflects the possibility that the information upon which the business risk decision…

Q: What determines the acceptable level of Detection Risk?

A: Detection Risk:   It is a chance that an auditor will fail to identify any material misstatement…

Q: Explain the types of risk?

A: Introduction: There is a risk involved in any company decision, and in personal life decisions. In…

Q: Define stand-alone risk

A: Stand-alone risk:This refers to the risk linked with a single aspect of a firm or any particular…

Q: Risk management focuses on what?

A: Organizations assess the stakeholder’s responses as risks or opportunities which would affect the…

Q: Define Risk aversion

A: A risk averse saver is an investor who favors inferior returns with recognized risks somewhat than…

Q: Hedging is used to deal with three areas of risk exposure. Which are those risks? Name them.

A: Following are the three areas of risk exposure: Transaction risk: Transaction risk alludes to the…

Q: Discuss some of the techniques available to reduce risk exposures.

A: Risk exposure is the estimated potential loss from ongoing or upcoming business operations. The…

Q: Explain what is risk decompositon

A: Risk is referred as the future uncertainty with reference to the deviation from an expected earnings…

Q: Explain risk of overreliance and risk of underreliance in brief.

A: Due to material misstatement, an auditor probably render  an unqualified opinion on the state of…

Q: Define . Slope of SML and its relationship to risk aversion

A: Introduction: SML refers to security market line, it is a line indicating the relationship between…

Q: Define Risk in general

A: In finance, risk is defined as the level of vulnerability that potentially creates financial loss…

Q: What types of information must be considered when it comes to risk and return?

A: Risk and return go hand in hand both are related to each other.There is direct correlation between…

Q: Explain types of Security Issuers and Guarantors?

A: Types of security issuers are described as follows: Banks– Banks generally issue securities to meet…

Q: What is event risk?

A: Event risk is the likelihood of a sudden event adversely affecting an organization, industry, or…

Q: Describe Inherent Risk.

A: Definition:   Audit Planning: Audit planning is the first step in the auditing process. The auditor…

Q: Discuss and explain the sub-processes of risk management

A: Risk management refers to those processes and steps which a finance manager undertakes to reduce the…

Q: What is risk and give examples

A: While making investment decisions risk and return should be taken into consideration.

Q: What is the difference between systematic risk and unsystematic risk? Give an example of each.

A: Risk: The possibility that the actual outcome in a situation will differ from the expected outcome…

Q: Explain political risk

A: Political risks are important to be considered because they have an impact on the profitability…

Q: What three techniques are used to assess stand-alone risk?

A: Stand-alone risk: Stand-alone risk is the risk related with the anticipated project cash flow. The…

Q: / Risk and Return

A: There are 3 things given in the question and asked for an explanation of only 1. Risk and Return…

Q: What do "threat," "vulnerability," and "risk" really mean?

A: Threat : A declaration of purpose to cause someone pain, harm, damage, or other hostile action as…

Q: Discuss about systematic and unsystematic risk.

A: Risk refers to the movement or fluctuation in the value of an investment. The movement can be…

Q: Calculate the risk neutral probability

A: Risk neutral probability = (er*Δt - d)/(u-d) r is risk free rate. Δt is time period between each…

Q: audit risk.

A: First option is wrong because the inherent risk is the risk of material misstatements that may exist…

Q: Explain the importance of pooling anddiversification for managing risk.

A: Pooling of risk can be defined as the spread of financial risk evenly among a large number of…

Q: Distinguish between: Systematic risk and Unsystematic risk

A: The risks faced by the company arises from both micro as well as macro levels. The risk arising out…

Q: Define uncertainity ?

A: "Uncertainty" in accounting refers to the difficulty of predicting outcomes because of limited or…

Q: What is sensitive analysis?

A: Sensitive analysis is a method for predicting the outcome of a decision if a situation turns…

Q: Define risk

A: Risk can be defined as whenever there are chances that the investments’ actual outcomes are…

Q: Define the term risk?

A: Types of risk: Investment risk Market risk Inflation risk Business risk Liquidity risk

Q: Identify the weakness and the risk relating to the above.

A: Answer: The weakness is the shortcoming in any process and risk is the factor that result due to…

Q: Provide a comprehensive definition of risk

A: Risk is described in financial terms as the probability that the actual gains of an event or…

Q: Explain relevant risk

A: Introduction: Risk can be characterised in terms of the uncertainty of future consequences resulting…

Q: Explain risk aversion

A: Introduction: Risk can be characterized in terms of the uncertainty of future consequences resulting…

Q: Define risky event

A: Risk is the variability in expected return and the actual return. When the actual return is more…

Q: Why is it important to be able to quantify risk?

A: Risk is the chance that an outcome of an investment's actual gain will differ from an expected…

Q: Define a risk event.

A: Risk Event:  When an event can cause losses to the company's stakeholders and investors due to…

Q: Distinguish between diversifiable and non-diversifiable risk

A:

Q: Explain the concept of risk management

A: Introduction: Risk can be characterized in terms of the uncertainty of future consequences resulting…