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After completing this reading, you should be able to:
- Define enterprise risk management (ERM) and explain how implementing ERM practices and policies can create shareholder value, both at the macro and the micro level.
- Explain how a company can determine its optimal amount of risk through the use of credit rating targets.
- Describe the development and implementation of an ERM system, as well as challenges to the implementation of an ERM system.
- Describe the role of and issues with correlation in risk aggregation and describe typical properties of a firm’s market risk, credit risk and operational risk distributions.
- Distinguish between regulatory and economic capital and explain the use of economic capital in the corporate decision making process
22 июл 2024
