REQUIRED 1) Discuss the difference between the definition of risk in finance given above and the definition of risk in statistics. 2 MARKS 2) Name and discuss one (1) objective why firms implement risk management programs. 5 MARKS 3) Briefly, discuss how each step in risk management process is carried out (4 above). Use a new paragraph to discuss each step. 5 MARKS 4) Briefly, discuss how each step in risk management process contributes to the firm's objective you identified in 2) above. 5 MARKS 5) In the conclusion, make your own conclusion whether risk management program should be implemented in firms based on cost/benefit analysis. 5 MARKS 6) Discuss the difference between GENERAL insurance and LIFE insurance. 3 MARKS This course covers the principles of risk management and insurance techniques. The course also discusses the theory and application of risk management and insurance to real world risk management decisions. Different disciplines define risk differently. However, in finance, risk is generally defined as the possibility or chances of NOT achieving your set objective of MAXIMIZING SHAREHOLDER WEALTH OR FIRM VALUE I hope by this time, students should have acquired enough knowledge about how risk managers identify, measure, control and monitor risk in order to eliminate, reduce, transfer or avoid it in their operational and strategic financial decisions to achieve their set objective of MAXIMIZING SHAREHOLDER WEALTH OR FIRM VALUE The textbook discusses four (4) steps on page 63 that a risk manager should accomplish to manage a firm's risk. Exhibit 3.1 is reproduced below to help you logically answer the assignment questions that follow Steps in the Risk Management Process Using Insurance 1: Identify loss exposures 1 2: Measure and analyze the loss exposures 3: Select the appropriate combination of techniques for treating the loss exposures: . 1. Risk control Avoidance Loss prevention Loss reduction 2. Risk financing Retention Non insurable transfers . Insurance 4: Implement and monitor the risk management program REQUIRED