Secrets of Risk Management
Sample Exercises

 
 

The course Secrets of Risk Management includes exercises designed to prompt group discussions and the exchange of ideas. Here are some examples. In the course, you will find that people often hold divergent opinions when confronted with questions like these.

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Sample Exercises

Sample 1. A man jumps out of an airplane without a parachute. If he is sure to die, is he taking risk?

Sample 2: Which is better, individual decision making or group decision making? Should decisions be made by individuals who are then responsible for the consequences, or should decisions reflect the combined wisdom of groups?

Sample 3: A trader puts on a speculative position. He has authority to do so, and the position causes no limit violations. His manager thinks the position will lose money and orders him to reverse it. The trader fumes that it is unfair basing his compensation on performance if someone else controls his book. As a risk manager, do you support the manager or the trader ... or should you do nothing?

Sample 4: Write your own definition of financial risk management. What exactly is its purpose within your organization? Be as precise as possible.

 

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Secrets of Risk Management

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