A GROWING REGIONAL BANK HAS ADDED A RISK COMMITTEE TO ITS BOARD. O...

23.

A growing regional bank has added a risk committee to its board. One of the first recommendations of the

risk committee is that the bank should develop a risk appetite statement. What best represents a primary

function of a risk appetite statement?

a.

To quantify the level of variability for each risk metric that a firm is willing to accept

b.

To state specific new business opportunities that a firm is willing to pursue

c.

To assign risk management responsibilities to specific internal staff members

d.

To state a broad level of acceptable risk to guide the allocation of the firm’s resources