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  #1  
Old 07-04-2017, 02:30 PM
egf5009 egf5009 is offline
 
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Default EOM 4 Task 4 Quickwich Risk Appetite

Hello,

For task #4 of the Quickwich assignment, our risk appetite requirements are a hard limit of -15% impact on any of the two measures examined and a soft limit of -10% impact on any of the two measures examined.

Does this mean that the goal is for 2 of the 4 sample risk exposures to be under 15% and then the other 2 to be under 10%? In this case, would I argue that Inappropriate Strategy should be mitigated because although it is under the hard limit we need one more under the soft limit?

Also, I assume we are using % change in gross profit as the exposure since % change in company value is well over the limit for 2 risks?

Thanks!
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Old 07-05-2017, 02:56 AM
hyphis hyphis is offline
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Interesting, whereas I read "risk measure" as being either

1-%change in gross profit
2-%change in company value

and not any of

1-inappropriate strategy
2-counterparty risk
3-tainted meat product
4-increase to minimum wage

which I thought were "sample risks" or "risk exposures"

So what I've done is come up with ways to mitigate the counterparty risk and tainted meat product as they are over the 15% threshold.

Thoughts?

Did I completely misread that?
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  #3  
Old 07-06-2017, 10:19 AM
egf5009 egf5009 is offline
 
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I see what you mean. So Inappropriate Strategy is within the hard limit but over the soft limit for both risk measures, Counterparty Risk and Tainted Meat Product are over the hard limit for % Change in Company Value and below/at the hard limit for % Change in Gross Profit and Increase to Minimum Wage is below the soft limit for both.

Do we need a plan to mitigate for Inappropriate Strategy if it's within the hard limit but over the soft limit? Or do we leave that one alone as it's just right and then mitigate Counterparty Risk and Tainted Meat Product and exploit Increase to Minimum Wage?
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Old 07-07-2017, 01:27 PM
aaggh2003 aaggh2003 is offline
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Quote:
Originally Posted by egf5009 View Post
I see what you mean. So Inappropriate Strategy is within the hard limit but over the soft limit for both risk measures, Counterparty Risk and Tainted Meat Product are over the hard limit for % Change in Company Value and below/at the hard limit for % Change in Gross Profit and Increase to Minimum Wage is below the soft limit for both.

Do we need a plan to mitigate for Inappropriate Strategy if it's within the hard limit but over the soft limit? Or do we leave that one alone as it's just right and then mitigate Counterparty Risk and Tainted Meat Product and exploit Increase to Minimum Wage?
I suggested a mitigation strategy for all three of them. It doesn't hurt to be more detailed than less right?
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  #5  
Old 07-18-2017, 09:49 AM
egf5009 egf5009 is offline
 
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Agreed, I just assumed we'd need to address that the risk appetite specifies any of the two measures for the hard limit and soft limit.
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Old 07-29-2017, 01:27 PM
egf5009 egf5009 is offline
 
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I get it now. There are only two measures, % Change in Gross Profit and % Change in Company Value. That's what was confusing me.
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