Questions 23, 24 and 25 use the following data:

RiskFlo Ltd has undertaken a risk assessment for a client and has identified the following metrics in relation to the clients fraud risk, assessed in terms of the potential amount or size of fraud losses, and the project net income:

• The monthly mean of fraud losses is $8,000 and monthly standard deviation of fraud losses is $49,000.

• The confidence level (assuming a normal distribution) is 95%.

• The risk free rate is 5%pa.

• The annual net income is $570,000.

Question 23

What is the Annualised Standard Deviation of losses (rounded to the nearest $000) for this client?

Select one:

a. $170,000

b. $266,000

c. $281,000

d. $970,000

e. $972,000

Question 24

What is the Economic Capital (round to the nearest $000) for this client?

Select one:

a. $3,400,000

b. $5,320,000

c. $5,610,000

d. $19,400,000

e. $19,440,000

Question 25

What is the Return on Risk Adjusted Capital (RORAC) (rounded to 2 decimal places) for this client?

Select one:

a. 2.94%pa

b. 3.10%pa

c. 10.16%pa

d. 10.71%pa

e. 16.76%pa