The portfolio view of ERM is one in which management reduces risks to acceptable levels by:
A) sharing risks with employees.
B) considering individual business unit risks and then aggregating those risks across the entity.
C) avoiding the use of third party service providers in all instances except those with the highest risk of business interruption.
D) terminating all entity activities that cause significant risk.

Question

Quizplus · Accepted Answer

The portfolio view of ERM involves considering the risks of individual business units and then aggregating them across the entity to determine overall risks. This approach allows management to identify areas where risks are highest and take actions to reduce them to acceptable levels. Sharing risks with employees (choice A) may be part of an overall risk management plan, but it is not specific to the portfolio view of ERM. Avoiding the use of third party service providers (choice C) is not always possible or desirable, as these providers can offer valuable expertise and resources. Terminating activities that cause significant risk (choice D) may be necessary in some cases, but is not always the best option for managing overall entity risk.

The Portfolio View of ERM Is One in Which Management