Financial Risk Manager Part 2
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A group of risk managers in a newly established asset management firm is assigned to implement the risk management process that includes three fundamental dimensions: risk planning, risk budgeting and risk monitoring. The managers start by discussing the components of and the guidelines included in the risk plan. Which of the following statements is correct?
A
Qualitative scenario analyses can be incorporated into a risk plan to identify factors that can cause aspects of the risk plan to fail.
B
A risk plan can set volatility goals but cannot incorporate the effects of the organization's key dependencies on these goals.
C
Extreme events should not be included in an organization's risk plan but they should be included in its strategic plan.
D
A risk plan should include an estimate of return on equity found by using the return on risk capital for each allocation taken independently.