Select from the option list provided the word or phrase that correctly completes each statement related to the principles of enterprise risk management $($ERM$)$ below.

Statement

Missing Item

$1.$ Culture is defined by internal and external elements. Internal factors that shape an organization's culture include $\_\_\_\_\_.$

$2.$ Risk appetite should be set at the optimal balance of opportunity and risk. Risk appetite is $\_\_\_\_\_.$

$3.$ The performance component of ERM includes identifying the content of the risk inventory. It also includes identifying $\_\_\_\_\_$ that alter goals or approaches for value creation.

$4.$ The organization identifies, prioritizes, assesses, and responds to risks. It develops a risk view based on the level of risk. The risk $\_\_\_\_\_$ view relates to entity$-$wide strategy and objectives.

$5.$ An organization should pursue improvement, even if targeted performance is achieved. Methods of identifying improvement include $\_\_\_\_\_.$