Question
Manchester Holdings, a large conglomerate, is implementing the enterprise risk management (ERM) framework to quantify and manage the risk-return trade-off for the entire firm. Which
Manchester Holdings, a large conglomerate, is implementing the enterprise risk management (ERM) framework to quantify and manage the risk-return trade-off for the entire firm. Which of the following statements about the ERM framework is/are correct?
I: The performance of each business unit should be evaluated on a stand-alone basis, and the unit should be allocated more capital if its net income is positive.
II: The ERM framework does not include a bottom-up approach to risk management.
Group of answer choices
Both statements are correct
Statement I only
Statement II only
Both statements are incorrect
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