To offset costs arising from operational risks, FI managers spend considerable efforts on the following:
A) Loss prevention, loss control, loss financing and loss insulation.
B) Loss prevention, loss control, loss investment and loss insulation.
C) Loss provisioning, loss control, loss financing and loss insulation.
D) Loss prevention, loss control, loss financing and loss creation.

Question

Quizplus · Accepted Answer

Loss prevention refers to preventing losses from occurring in the first place. Loss control involves minimizing the impact of losses that do occur. Loss financing involves using financial instruments such as insurance to offset the costs of any losses. Loss insulation involves reducing the impact of losses on the overall financial health of the organization. These four strategies help FI managers to manage and mitigate operational risks. Choice A is the best option as it correctly identifies the four key strategies used by FI managers to offset costs arising from operational risks.

To Offset Costs Arising from Operational Risks, FI Managers Spend