The process of detecting hazards and assessing the associated risk is called risk assessment. It involves identifying potential hazards, evaluating the likelihood and severity of the risks they pose, and determining appropriate measures to mitigate or manage those risks. Risk assessment is an essential step in risk management, as it helps organizations make informed decisions to protect people, assets, and the environment from potential harm.
The Fund Manager does not outsource portfolio management and investment decision making to the Fund Administrator. This is because these tasks require expertise and knowledge specific to the Fund Manager's investment strategy and objectives. By keeping these responsibilities in-house, the Fund Manager can have more control over the investment decisions and ensure they align with the fund's goals. On the other hand, tasks such as payment of fund expenses and reconciliation of broker statements can be outsourced to the Fund Administrator as they are more administrative in nature and can be efficiently handled by a third-party service provider.
The correct answer is a condition with the potential to cause personal injury or death, property damage, or mission degradation. This definition of hazard encompasses a range of potential consequences, including harm to individuals, damage to property, and negative impacts on mission objectives. It recognizes that hazards can pose risks to both human safety and the successful completion of a mission or task.
Operational Risk Management is the correct answer because it refers to the process of identifying, assessing, and prioritizing risks associated with military operations. It involves making informed decisions about how to mitigate these risks and implementing effective controls to minimize their impact. This approach ensures that military operations are conducted in a safe and efficient manner, taking into account potential risks and their potential consequences.
Fund administration falls into the category of Back Office. The Back Office is responsible for the administrative and support functions of a financial institution, including tasks such as record-keeping, settlement, and processing of transactions. Fund administration involves activities such as accounting, reporting, and compliance for investment funds. These tasks are typically performed in the back office to ensure smooth operations and compliance with regulatory requirements.
Risk is the correct answer because it refers to the expression of possible loss in terms of severity and probability. Risk is a measure of the likelihood and potential impact of an event or action, taking into account both the probability of occurrence and the potential consequences. It involves assessing and managing potential hazards, evaluating their severity and likelihood, and making informed decisions to mitigate or accept the associated risks.
Funds Administration refers to the range of services offered to facilitate the operations of a fund. This includes tasks such as managing investments, handling transactions, maintaining records, and providing reporting and accounting services. Therefore, it is accurate to say that Funds Administration is the name given to the set of services provided in support of the running of a fund.
The statement is true because fund administrators are responsible for various tasks related to the management of a fund, including shareholder services. This includes handling the processing of subscriptions, which is when investors contribute money to the fund, and redemptions, which is when investors withdraw their money from the fund. By providing these services, the fund administrator ensures smooth and efficient transactions for the shareholders of the fund.
The correct answer is the likelihood that a hazard will result in a mishap or loss. This is because risk refers to the possibility or probability of an undesirable event or outcome occurring. In this case, the undesirable event or outcome is a mishap or loss, which can be caused by a hazard. Therefore, risk is the likelihood that a hazard will result in a mishap or loss.
The statement is explaining that the Funds Administration Industry consists of companies that offer support services. This means that the statement is true because it accurately describes the definition and scope of the industry.
The fund manager outsources fund administration services to 3rd party service providers. This means that the fund manager hires external companies or organizations to handle tasks such as accounting, reporting, and compliance on behalf of the fund. By outsourcing to 3rd party service providers, the fund manager can benefit from their expertise and specialized services, allowing them to focus on their core investment strategies. This also helps in reducing costs and improving efficiency as the fund manager does not have to invest in building and maintaining an in-house team for fund administration.
