QUESTION 1 (25)

Each identified risk has to be assessed taking into consideration the likelihood of occurrence and impact on the achievement of the organisation's objectives overtime horizon. The gross, net and residual risks are assessed in terms of likelihood and impact. Quantitative and qualitative approaches are combined to assess risks. The likelihood and impact may be quantified according to different measurement scales.

Adapted: Benabbou, L - Enterprise Risk Management: A Case Study of a Moroccan Financial Institution

1.1 In the context of the extract, describe the typical definitions of likelihood and also the definitions of impact in risk management. (10)

1.2 Evaluate the efficiency and effectiveness of ANY FOUR (4) techniques of risk assessment that can be used in any organisation. (15)