Question 4 [5 Marks} Provide six {6] examples of process risk and explain hDW they.r aect business operations. Question 5 [5 Marks} Discuss the five {5} biases which people have when investing. Outline hDW these biases impact investment decision making and portfolio management. Enterprise Risk Management Example in Banking Toronto-headq uartered TD Sank organizes its risk management around two pillars: a risk management framework and risk appetite statement. The enterprise risk framework denes ttre risks the bank faces and lays out risk management practises to identify, assess, and control risk. The risk appetite statement outlines the bank's willingness to take on risk to achieve its growth objectives. Both pillars are overseen by the risk committee of the company's board of directors. Risk management frameworks were an important part of the lntemational Organization for Standardization's Stt] standard when it was rst written in 2009 and have been updated since then. The standards provide universal guidelines for risk management programs. Risk management frameworks also resulted from the efforts of the Committee of Sponsoring Organizations of the Treadway Commission {COSO}. The group was formed to ght corporate fraud and included risk management as a dimension. Once TD completes the ERlv'l framework, the bank moves onto the risk appetite statement. The bank, which builta large US presence through major acquisitions, determined that it will only take on risks that meet the following three criteria: The risk ts the company's strategy, and TD can understand and manage those risks. The risk does not render the bank vulnerable to signicant loss from a single risk. The risk does not expose the company to potential harm to its brand and reputation. Some of the major risks the bank faces include strategic risk, credit risk, market risk, liquidity risk, operational risk, insurance risk, capital adequacy risk, regulator risk, and reputation risk. Managers detail these categories in a risk inventory. The risk framework and appetite statement, which are tracked on a dashboard against meh'ics such as capital adequacy and credit risk, are reviewed annually. TD uses a three lines of defense {SLODJ strategy, an approach widely favored by ERM experts, to guard against risk. The three lines are as follows: A business unit and corporate policies that create controls, as well as manage and monitor risk Standards and governance that provide oversight and review of risks and compliance with the risk appetite and framework lntemal audits that provide independent checks and verication that riskmanagement procedures are effective Source hgs:iiwwwsmartsheet.comicontentieritergriseriskmanagementexamgles Answer ALL the questions in this section. Question 1 {E Merits} All organisations need to implement the best possible framework for optimizing strategy and performance. With this in mind, discuss the benets of Enterprise Risk Management {ERM}. Question 2 {B Merits} Discuss how an audit committee would have to test the effectiveness of the risk management arrangements in place. Question 3 {5 Merits} Process risk relates to the objectives of a business that are not met due to the prowess designed by the business failing to support the business model. Discuss the characteristics or variables which contribute to the failure of a business designed process {process risk]. Question 4 [E Marks} Proyide six [6] examples of process risk and explain how they aect business operations