Learning Activity 2_ Attempt review

pdf

School

Kaplan Business School *

*We aren’t endorsed by this school

Course

FNS50322

Subject

Finance

Date

Jan 9, 2024

Type

pdf

Pages

7

Uploaded by MateNarwhalMaster978

Report
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
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
15/11/2023, 14:48 Learning Activity 2: Attempt review https://financeinstitute.ecampusv2.com.au/mod/quiz/review.php?attempt=238476&cmid=3743 4/7 Question 8 Correct Mark 1.00 out of 1.00 Question 9 Correct Mark 1.00 out of 1.00 Question 10 Correct Mark 1.00 out of 1.00 Risk assessment focuses on what can happen, while risk sourcing focuses on why, how and where the risk occurs. Choose three from below which an established broker would consider to be a current source of risk. a. Deficiency in the business's compliance paperwork b. Inadequate communication skills of manager/s c. Financial overextension d. Profit goal at 5 years not reached e. Unemployment predicted to be 2% higher in coming year f. Foreign-owned lending institutions set to increase in number g. Appropriate and realistic performance expectations h. Avoidance of self-employed clients due to complexity i. All of the above Risks commonly encountered in business can be broadly categorised as follows: a. Financial Risk, Employee Risk, Physical Risk, Legislative Risk b. Strategic Risk, Operational Risk, Financial Risk, Physical Risk, Legal Risk c. Financial Risk, Physical Risk, Collateral Risk, Legal Risk d. Credit Risk, Legal Risk, Physical Risk, Company Risk, Liquidity Risk Risks commonly encountered in businesses can be broadly categorised as Strategic Risk, Operational Risk, Physical Risk, Legal Risk and Financial Risk. Which of these risk categories is the risk arising from failure to comply with statutory or regulatory obligations? a. Strategic b. Environmental c. Physical d. Legal e. Financial
15/11/2023, 14:48 Learning Activity 2: Attempt review https://financeinstitute.ecampusv2.com.au/mod/quiz/review.php?attempt=238476&cmid=3743 5/7 Question 11 Correct Mark 1.00 out of 1.00 Question 12 Correct Mark 1.00 out of 1.00 Question 13 Correct Mark 1.00 out of 1.00 To mitigate the possibility of risk events eventuating, when a business manager undertakes a “spot check” what might they be looking for? a. Insurance policies are in place, current and adequate b. Social media presence is adequate following increase in competition c. Training of all staff has met industry requirements d. Wages and reward schemes are meeting expectations e. Security of data is being maintained through adequate software f. All of the above Under General Conduct Obligations a credit licensee is required to maintain adequate risk management systems and have available adequate resources (including financial, technological and human resources). This ensures which of the following: a. Compliance with licensee obligations: s47(1) of the National Credit Act b. Compliance with ASIC’s RG78 c. That Professional Indemnity insurance compliance is not breached d. That potential fraud or negligence will be dealt with by APRA Using a Risk Map gives us a visual for which one of these? a. The Probability being the likelihood of an event occurring and the consequences being the impacts of the risk if it occurred b. For proving through a diagram that all identified risks will require intervention c. A geographical representation of where business franchises are located on a map d. To assist companies to prioritise the risks associated with the actions of their competitors e. To determine the Residual Risks a company faces
15/11/2023, 14:48 Learning Activity 2: Attempt review https://financeinstitute.ecampusv2.com.au/mod/quiz/review.php?attempt=238476&cmid=3743 6/7 Question 14 Correct Mark 1.00 out of 1.00 Question 15 Correct Mark 1.00 out of 1.00 Question 16 Correct Mark 1.00 out of 1.00 Question 17 Correct Mark 1.00 out of 1.00 When it comes to fixed and variable loans, which of the following cost structures would generally be considered the LOWEST risk? a. Fixed costs that are higher than variable costs b. Very high fixed costs and very low variable costs c. Variable costs that are higher than fixed costs d. Both high variable costs and high fixed costs When reviewing your own area of business operation which of the following should be taken into consideration? a. How to improve the identification of risks and communicate areas of concern to stakeholders b. How to manage risk sources c. How to assess risk and implement controls d. All of the above A limited number of suppliers may impact a business unfavourably? Select one: True False A risk map should not be kept private but provided to appropriate stakeholders as required. Select one: True False
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
15/11/2023, 14:48 Learning Activity 2: Attempt review https://financeinstitute.ecampusv2.com.au/mod/quiz/review.php?attempt=238476&cmid=3743 7/7 Question 18 Correct Mark 1.00 out of 1.00 Question 19 Correct Mark 1.00 out of 1.00 Question 20 Correct Mark 1.00 out of 1.00 Question 21 Correct Mark 1.00 out of 1.00 Financial performance means generating new resources from day to day operations over a period of time Select one: True False Financial position is the business’s set of financial resources and obligations at a point in time Select one: True False Financial statements are the reports describing financial performance and position Select one: True False Notes are part of the statements, adding explanations and interpretations of the numbers Select one: True False