ANY FOUR (4) questions in this section. [100 MARKS] QUESTION 1 (25 Marks) Risk map classifies net risks as critical, high, medium and low. Depending on the exposure of each risk, a treatment strategy is chosen: accept, transfer, avoid and reduce. For each risk, the risk owner decides the appropriate strategy. In view of the fact that the potential returns of some financial risks are attractive in comparison to the risks faced, some PMD financial risks were accepted, and risk owners (asset managers) had to manage their risks under the appropriate risk tolerance which. Adapted: Risk Assessment Case Studies Summary Report, Techneau, July 2010 1.1 In that context discuss what you understand by the term risk mapping and comment on the applicability and relevance of this concept in any organisation of your choice. (10 marks) 1.2 Discuss the FIVE (5) key challenges in the implementation of full risk modelling activities in your organisation. (15 marks) QUESTION 2 (25 Marks) Each identified risk has to be assessed taking into consideration the likelihood of occurrence and impact on the achievement of the organizations objectives over time horizon. The gross, net and residual risks are assessed in terms of likelihood and impact. Quantitative and qualitative approaches are combined to assess the risk in an organization. Adapted: Risk Assessment Case Studies Summary Report, Techneau, July 2010 2.1 In light of the above differentiate between qualitative and quantitative risk approaches and highlight which of these approaches is mostly used by the banking sector in South Africa . (15 marks) 2.2 Discuss the advantages and disadvantages of using a combined quantitative and qualitative approach to assess risk within any organization of your choice. (10 marks) QUESTION 3 (25 Marks) 3.1 Discuss and provide examples of subtler situations, in which the formulae to assess the aggregate impact of several variables may be more complex than simple arithmetic operations. (15 marks) 3.2 Discuss fully your understanding of the term full risk models and evaluate their importance and effectiveness in an institution / organization of your choice. (10 marks) QUESTION 4 (25 Marks) Uncertainty is a key concept in risk conceptualization and risk assessments. How to understand and deal with the uncertainties has been intensively discussed in the literature, from the early stages of risk assessment in the 1970s and 1980s, until today. Still the topic is central one. Adapted: Aven, T. (2016), Risk Assessment and Risk Management: Review of Recent Advances on their Foundation. 4.1 In light of the above, explain what you understand by the term process alignment and explain how your organization ensures effective process alignment in order to achieve their objectives. (10 marks) 2 DN 4.2 In the context of any organization of your choice, discuss the minimum additional work that the implementation of a formal risk assessment process requires? (15 marks) QUESTION 5 (25 Marks) Both version of ISO31000 2009 and 2018 version have been developed, reviewed and tested in case organizations. However, there are several issues that potentially face the organizations that implement several management system such as ISO9001:2015, ISO14001:2015 and ISO45001:2018. The ISO31000 risk management framework have been refined and improved that include detail steps in risk management process. This will enable organization design, integration and implementation of risk management framework effectively. Adapted: E.F. Ramly and Osman, M.S. (2018), Development of Risk Management Framework. Proceedings of the International Conference on Industrial Engineering and Operations Management Paris, France, July 26-27, 2018 5.1 In light of the above, comprehensively discuss the criticisms of full models in risk management using any organisation(s) of your choice. (15 marks) 5.2 Discuss the difference between simulation and risk modelling and which of the two do you think is an effective tool in assessing the risk profiles in an organisation. (10 marks