RM – JUL 2020 – L4 – Q6 – Short Notes on Risk Concepts

Write short notes on risk capacity (including dependencies), risk appetite, country risk analysis, and business priority heat map.

Question

Write short notes on each of the following;

(a) Risk Capacity, including its dependencies. (5 marks)

(b) Risk Appetite. (5 marks)

(d) Business Priority Heat Map. (5 marks)

Answer

(a) Risk Capacity (5 marks)

Maximum risk absorbable, dependent on capital, liquidity, and markets. E.g., GCB assesses post-2025 factors.

(b) Risk Appetite (5 marks)

Willing risk level, set by Board. Ecobank limits FX to 20%.

(c) Country Risk Analysis (5 marks)

Evaluates cross-border risks via PESTEL. Stanbic uses for trade.

(d) Business Priority Heat Map (5 marks)

Visual risk ranking. Fidelity uses for resource allocation.