Which of the following best describes operational risk?

The risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events.

The risk of market fluctuations

The risk of political instability

The risk of interest rate changes

Why is it important for organizations to manage operational risk effectively?

To safeguard reputation, protect assets, and maintain financial stability.

To diversify investment portfolios

How can human error contribute to operational risk?

By causing mistakes in day-to-day operations or decision-making processes.

By increasing market fluctuations

What is the role of a risk manager in managing operational risk?

Identifying, assessing, and monitoring operational risks to develop effective risk management strategies.

Ignoring risk management practices

What is a common consequence of ineffective operational risk management?

Financial losses and damage to reputation

What is the purpose of conducting scenario analysis in operational risk management?

To assess potential impacts of various risk events on the organization.

Which of the following is a key component of operational risk management?

Identifying and assessing operational risks

How can operational risk be mitigated in an organization?

Implementing strong internal controls and procedures

Ignoring risk management practices

Operational risk | Quizalize

Good day this is Chris today we will be doing a quick walkthrough on ISO 14001 2015 Environmental Management System and its main clauses let's get started ISO 14001 2015 Environmental Management System is a globally recognized standard for environment Management systems or EMS an EMS is a framework that organizations use to manage their environmental impact comply with regulations and improve their environmental performance the standard outlines are requirements for an EMS including the development of an environmental policy the identification of environmental aspects and impacts the establishment of objectives and targets the implementation of operational control monitoring and measurement systems and the ongoing review and Improvement of the system ISO 14001 is a flexible standard that can be used by organizations of any size or type regardless of their environment impact or level of environment performance it provides a practical framework for organizations to manage their environmental impact reduce environment risks and demonstrate their commitment on sustainability to their stakeholders here is the standard that provides a structured approach to develop an EMS which includes several key steps one organizations must develop an environmental policy that outlines their commitment to environmental sustainability this policy should be communicated to all employees and stakeholders two organizations must identify their environmental aspects and impacts this involves identifying the activities products and services that have an impact on the environment as well as the potential environmental consequences of those impacts three once the environmental aspects and the impacts have been identified organizations must establish environmental objectives and targets these objectives and targets should be specific measurable achievable relevant and time-bound 4. after setting objectives and targets organizations must Implement operational controls and establish monitoring and measurement systems to ensure that they are meeting their objectives and targets finally organizations must review and continually improve their EMS this involves conducting regular audits reviewing the EMS to ensure that it remains relevant and effective and making any necessary changes or improvements the main Clause of iso 14001 2015 apart from its scope normative references and terms and conditions that the main Clauses of iso 14001 2015 can be listed as context of the organization leadership planning support operation performance evaluation and Improvement Clause 4.0 context of the organization is about understanding the organization and its context understanding the needs and expectations of the interested parties determining the scope of the Environmental Management System EMS and Environmental Management System itself Clause 5.0 talks about leadership and commitment Environmental Policy organizational roles responsibility and authorities Clause 6.0 planning focuses on actions to address risk and opportunities as well as environmental objectives and planning to achieve them Clause 7.0 support are detailed requirements on resources competence awareness communication that includes external and internal communication documented information that involves creating updating in control of documented information Clause 8.0 operation talks about operational planning and control as well as emergency preparedness and response overall the design of iso 14001 2015 provides guidelines to form a system that is structured to cater the requirements of stakeholder needs and expectations to drive life cycle perspective and Energy Efficiency as pictured here Clause 9.0 performance evaluation provides guidelines to monitoring measurement analysis and evaluation evaluation compliance and management review an additional note here is that ISO 19011 2018 guidelines for auditing Management Systems which is an audit process that will determine the scope to establish the audit criteria by collecting evidence evaluating the evidence and then draw a conclusion based on the findings as pictured here [Music] finally Clause 10.0 Improvement talks about how Improvement is an integral factor to an effective Environmental Management system through General non-conformity and corrective action and continual Improvement talking about Improvement it is always continual in putting efforts towards the betterment of the existing system here is a snapshot of the main Clauses of iso 14001 2015 [Music] I hope you find this video useful we are industry experts specialized in management system consultancy and Industry relevant corporate training give us a call and let us help you drive your business excellence and upskill your employees to elevate workplace efficiency [Music] CREATE 10 MCQ AND 2 SAQ QUESTIONS BASED ON THE ABOVE PARAGRAPH

Why and How Managers Plan Importance of planning The planing process Benefits of planning Planning and time management Types of PLans used by managers Long term and short term plans Strageic and tactical plans Operational plans Planning Tools and Techiqunes Forecasting Contrigency planning Scenario planning Benchmaking Use of staff planners Implementing Plans to Achive Results Goal setting Goal management Goal alignment Participation and involvement Planning Def: The process of setting objectives and determining how best to accomplish them Planning at Eaton Corporation “Making the hard decision before events force them upon you, an anticipating the future needs of the market before the demand asset itself Objectives and goals Identifity the specific results or desired outcomes that one intends to achieve Plan Def: A statement of action steps to be taken in order to accomplish the objectives (goals) Steps in the planning process: Define your objectives Determine where you stand vis-a-vis objectives Develpo premises reagrdsing future conditions Analyze alternatives and make a plan Implement the plan and evaluate results What are the benefits of planning Improves focus and flexibility Imporves action orteitation Imporves coordination and control Imporves time management Time Managment Personal time management tips Do say “no” to request that distract you form what you should be doing Dont get bogged down inn details that can be addressed later Do screen telephone calls, emails and meeting request Dont let drop in visitors, text messaging use up your time Do prioritize your important and urgent work Dont become calendar bound by letting other control your schedule Do follow priorities; do most important and urgent work first Some 77% of mangers in one survey said that digital age has increased th number of decisions they have to make 43% said there was less time available to make these decisions Types of plans used by Managers What is teh time horizon Long term vs Short term Long term Look three or more years into teh future Short term plans Typically cover one year or less However: the increasing environmental complexity and dynamism of recent years has severely tested the concept of “long-term” planning Plans are subject to frequent revisions Most executives would likely agree that these complexities adn uncertainties challenge how er actually go about planning and how far ahead we can really plan At the very least we can conclude that there is a lot less permanency to long term plans today and that tey are subject to frequent revision Managment reaeracher Eillot Jaques believes tha people vary in their capability to think with different time horizons Types of Plans used by Managers (3 of 5) Strategic plans Set broad, comprehensive and linger term action directions for teh entire organization or major division Vision Clarifies purpose of the organization and what it hopes to be on the future Typical plans Specify how the organizations resources are used to implement strategy Tactical plans in business often take the form of functional plans Functional plans Incidate how different component within the organiztion will help accompnlish the overall strategy Production plans Finacial plans Facilites Plans Logisitc plans Marketing plans Human Resource Plans Operation plans Describe short-term activities to implement strategic plans Policies: Are standing plans that communicate guidelines for decisions Ex: Policies on office romances: The media is quick to report when a top executive or public figures runs into trouble over an office affair. Are there ant policies on office romances? Employer polices on office raltioshiis vary. One survey find teh following: 24% prohibit relationships among employees in the same department 13% prohibit relationships among employees who have the smae supervisor 80% prohibit relationships between supervisors and subordinates 5% have no restrictions on office romances Procedures: Are rules that describe actions to be taken in specific situations Budgets: are single use plans that commit resources to projects or activities Zero based budgets: allocate resources as if each budget were brand new There is no guarantee that any past funding will be renwer. All propsales, old and new, must compete for available funds at teh start of each new budget cycle Forcasting Attempts to predict the future Qualitaive forecasting uses expert opinions Quantitative forecasting uses mathematical models and statiscal aanylsis of historical data dna surveys Contingency planning Identify alternative course of action to take when things go wrong Anticipate changing conditions Contain trigger points to indicate when to activate plan (or a specific course of action) Scenario planning A long term version of contingency planning Identifying alternative future scenarios Plans made for each future scenario Increases organizations flexibility and preparation for future shocks Benchmarking Use of external and internal comparisons to better evaluate current performance Adopting best practices: things people adn organization do that lead to superior performance Staff Planners Experts who assist in all steps of the planning process They help bring focus and expertise to a wide variety of planning tasks Important: Communication between staff planers landline managers is essential for teh success of teh planning process Goal Setting - Always set SMART goal The solution: Goal Aligment Between Team Leader and Team Member Jonintly plan: Set objectives, set standards, choose actions Individually acy: Perform tasks (member), provide support (leader) Jointly control: Review results, discuss implications, renew cycle x4 Collective effort and commitment Participatroy planning Includes in all planning steps that people who will be affected by the plans adn askedd to help implement them Unloacks motivational potential of goal setting Management by objective (MBO) promotes participation Participation increases understanding and acceptance of plan and commitment to success Participatory planning - Number of people involved in teh decision making process Amazon is intensely focused on what it does. It believes in creating tight single-threaded teams, also known as “2 pizza team.” Data and Decision Making What are some of the important competencies managers must have today? Delegate Marketing and technology Manager must have Technological competency Ability to understand new technologies and to use them to their best advantage Information competency Ability to locate, gather, organize and display information for decision-making and problem solving Analytical competency Ability to evaluate and analyze information to make actual decisions and solve real problems What is the difference between Data and Information Data Raw facts and observation Information Data made useful and meaningful for decision-making Important concepts Big data Exists in huge quantities and is difficult to process without sophisticated mathematical and analytical techniques Data production today Bernard Marr is an internationally best-selling author. He helps organizations improve their business performance, use data more intelligently Data mining The process of analyzing data to produce useful information for decision-makers Management Analytics The systematic evaluation and analysis of data to make informed decision Information drives management Bad Data Refers to information that can be erroneous, misleading, and without general formatting The challenge: Can er use the data that is available in the “Big Data” Needs to be valid Can not trust everything out there Being ethical Look at the trends Data is structured and unstructured Data BIg Data = Structured + Unstructured Information Drive Management decision making What are the characteristics of useful information Easy to access If its credible Accurate Characteristics of useful information: Timely High quality Complete Relevant Understandable What about bad data It's not credible Miss information If it is not structured/ organized Bias based on opinions Confusing If its updated Bad data Refers to information that can be erroneous miss What are some examples of Management information system Business intelligence -BI Information systems to extract and report data in organized ways that are useful to decision-makers Executive dashboards Visually update and display key performance metrics (or Key Performance Indicators -KPIs) and information on a real-time basis Information needs in organization External Environment Information exchanges with the external environment Gather intelligence information Provide public information Information needs within the organizations (internal Enviroement) Information exchange within the organization Facilitate decision making Facilitate problem-solving Managers as information processors Continually gather, share and receive information Now as much electronic as it is face-to-face Always on, always connected How many people telecommute at least once a week 70% of people globally work remotely at least once a week, Work at home after covid 19 our forecast Our best estimate it that 25-30% of the workforce will be working form home multiple days a week by the end of 2021 As of 2023, 12.7% of full time employees work from home, while 28.2% work a hybrid model Managers as problem solvers Problem-solving The process of identifying a discrepancy between actual and desired performance and taking action to resolve it Ishikawa Fishbone diagram To identify the cause of problems Decision A choice among possible alternative courses of action Performance threat Something is wrong or has the potential to go wrong Performance opportunity The situation offers the chance for a better future if the right steps are taken Problem-solving approaches or style - from textbook Problem avoiders Inactive in information gathering and solving problems Problem seekers Proactive in anticipation of problems and opportunities and taking appropriate action to gain an advantage Problem solvers Reactive in gathering information and solving problem Managers - can approach problems in a systematic or intuitive manner Systematic thinking approaches problem in rational, step-by-step and analytical fashion Intuitive thinking approaches problems in a flexible and spontaneous fashion Multidimensional thinking- applies both intuitive and systematic thinking Managers face structured and unstructured problems Structure problems Are ones that are familiar, straight forward, and clear with respect to information needs Program decisions apply solutions that are readily available from past experiences to solve structured problems Know how to solve them Familiar Know what we are dealing with Unstructured problems Are ones that are full of ambiguities and information deficiencies Nonprogrammed decisions apply a specific solution to meet the demands of a unique problem Commonly faced by higher-level management Crisis decision making A crisis involves an unexpected problem that can lead to disaster if not resolved quickly and appropriately Ruled for crisis management Figure out what is going on Remember that speed matters Remember that slow counts, too Respect the danger of the unfamiliar Value the skeptic Be ready to “fight fire with fire” Managers make decisions with various amounts of information Certain environment Offers complete information on possible action alternatives and their consequences Risk environment Lacks complete information but offers probabilities of the likely outcomes for possible action alternatives Uncertain environment Lacks so much information that it is difficult to assign probabilities to the likely outcomes of alternative Ex: Certain and uncertain environments: The worldwide Governance Indicators for over 200 countries, comparing distinct environments (Canada-Brazil) Step 1-Identify and define the problem Focuses on information gathering information processing and deliberation Decision objectives should be established What are some common mistakes in definding problems? Common mistakes in defining problems Defining the problem too broadly or too narrowly Focusing on symptoms instead of causes Choosing the wrong problem to deal with Step 2- Generate and Evaluate Alternative Courses of Action Potential solutions are formulated and more information is gathered, data are analyzed, the advantages and disadvantages of alternative solutions are identified Common mistakes: Abandoning the search for alternatives too quickly Step 3- Decide on a preferred course of Action Two different approaches Behavioural model leads to satisficing decisions Classical model les to optimising decisions Behavioural Model Rationality is bounded because: There are limits our thinks capacity Available information (incomplete) Time constraints Step 4-Implement the decision Involves taking action to make sure the solution decided upon becomes a reality Managers need to have the willingness and ability to implement action plans Problems: Lack of participation error should be avoided Step 5 - Evaluate Results Involves comparing actual and desired results The positive and negative consequences of the chosen course of action should be examined If actual results fall short desire results, the manager returns to earlier steps in the decision-making process At all steps, check ethical reasoning Ask these spotlight questions Utility Does teh decision satisfy all constituents or stakeholders Rights Does the description respect the rights and duties of everyone? Justice Is the decision consistent with the canons of justice Caring Is the decision consistent with my responsibilities to care? Issues in decision-making How do errors happen? Heuristics: are strategies for simplifying decision-making Availability Bias: Bases a decision on recent information or events Representativeness bias: Bases a decision on similarity to other situations Anchoring and Adjustment Bias: Bases a decision on incremental adjustment from a prior decision point Framing error: Tring to solve a problem in the context perceived, positive or negative Confirmation Error: Focusing on information that confirms a decision already made Escalating commitment: Continuing a course of action even though it is not working Creative Decision making Creativity is the generation of a novel idea or unique approach that solves a problem or crafts an opportunity Big C: Creativity occurs when extraordinary things are done by exceptional people Little C: Creativity occurs when average people come up with unique ways to deal with daily events and situations The three types of situational creativity drivers Chapter review What are objectives and goals? The specific results or desired outcomes What are the 5 characteristics of great (SMART) goals? Forecasting - Attempts Qualitative forecasting uses options Quantitative forecasting uses mathematical models and statistical analysis of historical data and surveys Scenarios-Oracle’s crystal ball combines qualitative and quantitative methods

Introduction to Hedging Instruments: Forwards, Futures, Options, and Swaps Hedging instruments are financial tools used by businesses and investors to mitigate risk. These instruments help protect against adverse price movements in assets such as commodities, currencies, interest rates, or securities. The four main hedging instruments are forwards, futures, options, and swaps. 1. Forwards A forward contract is a customised agreement between two parties to buy or sell an asset at a predetermined price on a specified future date. Key Characteristics: Over-the-counter (OTC): Traded directly between parties, not on an exchange. Customisation: Can be tailored to suit the needs of the parties involved. Settlement: Occurs at the end of the contract, which may involve physical delivery or cash settlement. Risk: Forwards carry counter-party risk, as there is a possibility one party may default. Example: A company that needs to import raw materials in six months may enter into a forward contract to lock in the current price, avoiding the risk of price increases. 2. Futures A futures contract is similar to a forward, but it is standardised and traded on an exchange. This standardisation eliminates counter-party risk. Key Characteristics: Standardised: Contract size, expiration, and other terms are fixed by the exchange. Mark-to-market: Gains and losses are settled daily. Liquidity: Futures are highly liquid because they are traded on exchanges. Regulation: As they are traded on formal exchanges, they are more regulated than forwards. Example: A wheat farmer may sell futures contracts to hedge against a possible decline in wheat prices before harvest. 3. Options Options provide the right, but not the obligation, to buy or sell an asset at a specified price on or before a certain date. There are two types of options: call options and put options. Call Option: Gives the holder the right to buy an asset at a predetermined price. Put Option: Gives the holder the right to sell an asset at a predetermined price. Key Characteristics: Premium: The buyer pays a premium upfront to obtain the option. Limited Risk: The maximum loss is limited to the premium paid. Flexibility: Options can be used for speculative or hedging purposes. Example: An investor holding stocks may buy a put option to protect against potential declines in the stock's price. 4. Swaps A swap is a contract in which two parties agree to exchange cash flows or liabilities over a specific period. The most common types are interest rate swaps and currency swaps. Key Characteristics: Customizable: Like forwards, swaps are often tailored to meet the needs of the parties involved. Counterparty Risk: Swaps are typically OTC instruments, exposing parties to default risk. Common Uses: Used to manage interest rate risk or currency risk. Example: A company with a variablerate loan may enter into an interest rate swap to exchange its variable payments for fixedrate payments, thus locking in stable costs. Hedging instruments are essential for managing financial risk in volatile markets. Each instrument serves different purposes, with varying levels of complexity, risk, and customization. Whether through forwards, futures, options, or swaps, businesses can better plan for the future by reducing exposure to uncertain price fluctuations. Hedging Strategies for Market Risk, Credit Risk, and Currency Risk 1. Hedging Strategies for Market Risk Market risk (also known as systematic risk) arises from fluctuations in asset prices, such as stocks, bonds, commodities, and interest rates, due to economic factors or market volatility. Key Hedging Instruments for Market Risk: Derivatives (Options, Futures, and Forwards): These instruments allow investors to hedge against unfavorable price movements in stocks, commodities, or interest rates. Example: An investor holding a large stock portfolio might buy a put option to protect against a potential market downturn. If the market declines, the put option increases in value, offsetting losses in the portfolio. Short Selling: Investors can sell borrowed assets with the expectation of buying them back at a lower price, profiting from the decline. Example: A fund manager expecting a market decline may short sell stocks to hedge a portfolio against losses. Common Hedging Strategies: Portfolio Diversification: Reducing market risk by spreading investments across various asset classes (stocks, bonds, commodities) and sectors. Using Index Futures: Large portfolios can be hedged using index futures that track the performance of the overall market. If the market declines, profits from the short position in the futures contract will offset losses in the portfolio. Risk Parity: Allocating assets based on the level of risk rather than the dollar amount invested, balancing risk exposure across asset classes. 2. Hedging Strategies for Credit Risk Credit risk refers to the possibility that a borrower will default on a debt obligation. This is especially important for banks, lenders, and institutions dealing with bonds and loans. Key Hedging Instruments for Credit Risk: Credit Default Swaps (CDS): A financial derivative where the buyer of a CDS pays a premium to the seller in exchange for protection against a default on a loan or bond. Example: A bank holding corporate bonds can buy a CDS to ensure they are compensated if the issuing company defaults. Collateralised Debt Obligations (CDOs): These instruments pool together various debt instruments and allow risk to be distributed among multiple investors. Credit Insurance: Companies may use insurance to protect against the risk of a customer defaulting on payments. Common Hedging Strategies: Diversification of Loan Portfolio: Spreading out credit exposures across various industries, geographies, and borrower profiles reduces the overall risk of default. Tightening Lending Standards: Limiting exposure to highrisk borrowers by implementing stringent credit assessments. AssetBacked Securities: Banks can sell loans or bonds packaged as assetbacked securities to reduce their exposure to credit risk. 3. Hedging Strategies for Currency Risk Currency risk (or exchange rate risk) arises from fluctuations in foreign exchange rates, which can affect companies involved in international trade or with investments in foreign countries. Key Hedging Instruments for Currency Risk: Forward Contracts: A firm agrees to exchange a specified amount of currency at a predetermined exchange rate on a future date. Example: A U.S. exporter expecting payment in euros might enter into a forward contract to sell euros and lock in a favorable exchange rate. Currency Options: These give the right, but not the obligation, to buy or sell currency at a specific price. Example: A U.S.based company buying goods from Japan might buy a call option on the yen to hedge against the risk of yen appreciation. Currency Swaps: Two parties exchange interest payments and principal in different currencies to hedge against exchange rate fluctuations. Common Hedging Strategies: Natural Hedging: Companies can offset currency risk by balancing foreign revenue with costs in the same currency. For example, if a company generates revenue in euros, it can also incur expenses in euros, reducing exposure to exchange rate fluctuations. Multi-Currency Invoicing: Firms can invoice in their home currency, shifting the currency risk to the buyer. Currency Diversification: Holding a diversified basket of currencies can reduce exposure to large fluctuations in any one currency. Effective hedging strategies are crucial for managing various types of risks in financial markets. Market risk can be managed using instruments like futures and options, while credit risk can be mitigated through diversification and credit derivatives. Currency risk, often faced by multinational firms, can be hedged using forward contracts, options, or swaps. Each strategy helps firms and investors protect their portfolios, ensure financial stability, and reduce the impact of adverse movements in the financial markets. Portfolio Risk Management Techniques: Diversification, Asset Allocation, and Risk Budgeting Managing risk is a fundamental aspect of portfolio management. Investors use various techniques to control and reduce the risks inherent in investing. Three key techniques used in portfolio risk management are diversification, asset allocation, and risk budgeting. Each of these techniques helps in mitigating potential losses while aiming to achieve the desired return. 1. Diversification Diversification is a risk management strategy that involves spreading investments across different assets, sectors, or geographic regions to reduce exposure to any single risk. The idea is that different assets perform differently under various market conditions, so losses in one investment can be offset by gains in others. Key Benefits of Diversification: Reduction of Unsystematic Risk: Unsystematic risk, which is unique to a specific company or industry, can be reduced by holding a variety of investments that respond differently to market conditions. Improved Stability: A diversified portfolio is less volatile, as the negative performance of one asset can be balanced by the positive performance of others. Methods of Diversification: Across Asset Classes: Investing in a mix of asset classes such as stocks, bonds, commodities, and real estate. Example: A portfolio with 60% equities, 30% bonds, and 10% commodities is more diversified than one solely consisting of stocks. Within Asset Classes: Diversifying within a single asset class (e.g., holding stocks from different sectors like technology, healthcare, and energy). Geographic Diversification: Investing in assets across various countries or regions to mitigate country-specific risks. Example: Holding U.S. stocks along with emerging market equities can reduce risks related to a downturn in one country's economy. 2. Asset Allocation Asset allocation refers to the process of dividing investments among different asset classes (such as stocks, bonds, and cash) to align with an investor's risk tolerance, time horizon, and financial goals. Asset allocation plays a crucial role in portfolio risk management by determining the overall risk-return profile of the portfolio. Key Elements of Asset Allocation: Strategic Asset Allocation: A longterm approach that involves setting target allocations for different asset classes based on financial goals and risk tolerance. Example: A young investor with a longterm horizon might allocate 70% to stocks, 20% to bonds, and 10% to cash. Tactical Asset Allocation: A more active approach that involves adjusting the asset mix in response to short-term market conditions. Example: If the investor expects an economic downturn, they might temporarily reduce exposure to equities and increase exposure to bonds. Types of Asset Allocation Models: Conservative: Focuses on preserving capital with a larger allocation to bonds and cash (e.g., 20% stocks, 80% bonds). Balanced: A moderate risk approach with an equal focus on growth and income (e.g., 50% stocks, 50% bonds). Aggressive: Targets higher returns by investing predominantly in equities, accepting higher risk (e.g., 80% stocks, 20% bonds). Example of Asset Allocation: A 40 year old investor with moderate risk tolerance may allocate their portfolio as follows: 50% equities, 40% bonds, and 10% in alternative investments such as real estate or commodities. The equities provide growth potential, while the bonds and alternative assets offer stability and income. 3. Risk Budgeting Risk budgeting is a method of allocating risk across different components of a portfolio, rather than focusing solely on returns. The goal is to optimise the portfolio’s risk-return profile by distributing risk in a way that aligns with the investor’s objectives and risk tolerance. Key Concepts of Risk Budgeting: Risk Contribution: Each asset class or investment in the portfolio contributes a certain amount of risk (measured by metrics such as volatility or Value at Risk). Risk budgeting ensures that no single asset class dominates the overall risk of the portfolio. Example: A portfolio may contain 60% stocks and 40% bonds, but if the stocks are highly volatile, they may contribute 90% of the portfolio's risk. Target Risk: Investors set a maximum acceptable level of risk (e.g., a portfolio volatility of 10%) and allocate investments so that the total risk remains within this target. Techniques in Risk Budgeting: Risk Parity: Allocates risk evenly across asset classes, rather than allocating capital based solely on return expectations. Example: In a risk-parity portfolio, both bonds and stocks might be balanced in such a way that they contribute equally to the overall portfolio risk, even though the dollar investment in bonds may be larger due to their lower volatility. Value at Risk (VaR): This technique measures the potential loss in a portfolio over a specific time period, under normal market conditions, at a given confidence level. The risk budget ensures that the potential loss stays within acceptable limits. Example of Risk Budgeting: An investor targets an overall portfolio risk of 8% volatility. After analyzing the risk contribution of each asset class, they determine that equities, which currently make up 60% of the portfolio, contribute 70% of the risk. To adhere to the risk budget, the investor may reduce their equity exposure and increase their allocation to bonds or other less volatile assets. Diversification, asset allocation, and risk budgeting are complementary techniques used in portfolio risk management. Diversification reduces unsystematic risk by spreading investments across various assets. Asset allocation ensures that investments align with an investor's goals and risk tolerance. Risk budgeting focuses on managing the contribution of risk from each asset class to create a balanced and efficient portfolio. Together, these strategies help investors achieve a balance between risk and return, ensuring longterm portfolio stability. Risk Mitigation Through Insurance, Securitisation, and Other Financial Engineering Techniques Risk mitigation is a core objective in financial management, and various strategies can be employed to reduce or manage risks. Three major approaches are insurance, securitisation, and financial engineering techniques. Each of these methods helps firms and individuals transfer, reduce, or eliminate certain financial risks. 1. Insurance as a Risk Mitigation Tool Insurance is a traditional risk transfer method that protects against financial losses by shifting the risk to an insurance company in exchange for premium payments. It is widely used to mitigate various forms of risk, such as operational, liability, and property risks. Key Aspects of Insurance for Risk Mitigation: Risk Transfer: The insurer takes on the risk in exchange for a premium, thus protecting the insured party from unexpected financial losses. Indemnity: In the event of a loss, the insurance policy compensates the insured based on the terms of the contract. Customisable Coverage: Insurance policies can be tailored to address specific risks, such as property damage, business interruption, liability, or cyber risks. Types of Insurance for Businesses: Property and Casualty Insurance: Covers physical assets like buildings, machinery, and inventory from risks like fire, theft, or natural disasters. Liability Insurance: Protects businesses against legal liabilities arising from accidents, negligence, or professional errors. Business Interruption Insurance: Compensates for lost income if a business has to halt operations due to unforeseen events. Credit Insurance: Shields companies from losses due to the nonpayment of trade receivables. 2. Securitisation as a Risk Mitigation Technique Securitisation is a financial engineering process that involves pooling various financial assets (such as loans, mortgages, or receivables) and converting them into marketable securities. This process allows firms to transfer risk to investors, thereby reducing their exposure. Key Elements of Securitisation: Risk Transfer: By securitising assets, companies can transfer the risk of default or nonpayment to investors who purchase the securities. Liquidity Creation: Securitisation converts illiquid assets (like mortgages or loans) into liquid, tradeable securities, improving cash flow for the originating firm. Diversification of Risk: Pooling assets with different risk profiles reduces the impact of individual defaults, spreading the risk across multiple investors. Common Forms of Securitisation: MortgageBacked Securities (MBS): Pools of mortgages are bundled and sold as securities to investors, transferring the risk of mortgage defaults. Example: A bank that issues home loans can bundle those loans into MBS and sell them to investors, transferring the credit risk of potential defaults. Asset-Backed Securities (ABS): Similar to MBS, but backed by other types of assets like credit card receivables, auto loans, or student loans. Collateralised Debt Obligations (CDOs): Structured financial products that pool different types of debt, such as loans and bonds, and sell them as securities with varying risk levels. Example: A bank may issue a portfolio of auto loans and then pool these loans into an assetbacked security (ABS). The ABS is sold to investors, who take on the risk of loan defaults. By securitising the loans, the bank reduces its exposure to credit risk and generates immediate cash flow. 3. Financial Engineering Techniques for Risk Mitigation Financial engineering involves the use of complex financial instruments, derivatives, and structured products to manage or mitigate financial risks. These techniques allow firms to hedge against specific risks, optimize capital structure, and improve financial stability. Common Financial Engineering Techniques: Derivatives: Financial instruments like futures, forwards, options, and swaps are used to hedge against price fluctuations, interest rate changes, or currency movements. Example: A company with significant foreign exchange exposure may use currency forwards or options to hedge against exchange rate fluctuations, ensuring predictable cash flows. Options and Futures: Options: Provides the right (but not the obligation) to buy or sell an asset at a predetermined price, allowing firms to hedge against unfavorable price movements. Example: An airline company can buy options on jet fuel to hedge against rising fuel prices. Futures: Standardized contracts to buy or sell an asset at a set price on a future date, commonly used to hedge commodities or financial assets. Example: A wheat producer may use futures contracts to lock in a favorable price for its crop, hedging against a potential price drop. Swaps: These involve the exchange of cash flows between two parties, often used to manage interest rate risk or currency risk. Interest Rate Swaps: Firms can exchange floatingrate interest payments for fixedrate payments to hedge against rising interest rates. Currency Swaps: Used to hedge exchange rate risk in crossborder transactions by exchanging principal and interest payments in different currencies. Example: A company with a variablerate loan may enter into an interest rate swap to exchange its variable payments for fixedrate payments, locking in stable costs. Structured Products: These are customised financial instruments designed to achieve specific riskreturn objectives. They often combine derivatives with other securities to create tailored risk exposures. Example: A structured note that combines a bond with an embedded option, offering downside protection while allowing for potential upside linked to the performance of an equity index. Credit Derivatives: Tools like credit default swaps (CDS) allow investors to transfer credit risk to other parties. Example: A bondholder worried about a company’s potential default may purchase a CDS, which pays out in case of a default event. Example: A company may issue a bond with an embedded call option, allowing it to repurchase the bond if interest rates decline. This financial engineering tool enables the company to mitigate the risk of rising interest rates, reducing future borrowing costs. Risk mitigation through insurance, securitisation, and financial engineering offers businesses a variety of tools to manage and transfer risks. Insurance allows for the direct transfer of risk to an insurer, while securitisation helps companies offload risk by packaging and selling assets as securities. Financial engineering techniques, including derivatives, swaps, and structured products, provide sophisticated ways to hedge market, interest rate, and currency risks. Each approach helps organizations improve financial stability, enhance liquidity, and manage potential losses in a volatile market environment.

Lide 1: Introduction to Bioreactor A bioreactor is a vessel used for growing microorganisms, plant or animal cells Provides controlled conditions for biological reactions Maintains optimum pH, temperature, oxygen, and nutrients Widely used in fermentation, enzyme, vaccine, and antibiotic production Ensures sterile and aseptic environment Scale ranges from laboratory to industrial production Slide 2: Basic Design Requirements of a Bioreactor Must be constructed with non-toxic, corrosion-resistant materials Should allow effective mixing and mass transfer Provision for sterilization (in situ sterilization) Must maintain uniform temperature and pH Easy sampling without contamination Should support scalability and automation Slide 3: Materials Used in Bioreactor Construction Stainless steel (SS-316) for industrial bioreactors Glass for laboratory-scale bioreactors Plastic (polycarbonate) for disposable bioreactors Materials must withstand heat and pressure Should be smooth to prevent microbial attachment Resistant to chemicals and cleaning agents Slide 4: Main Parts of a Bioreactor Vessel: holds the culture medium and microorganisms Agitator (impeller): provides mixing Sparger: supplies sterile air Baffles: prevent vortex formation Sensors: monitor pH, temperature, dissolved oxygen Ports: used for inoculation, sampling, and feeding Slide 5: Agitation System Ensures uniform mixing of nutrients and cells Improves oxygen transfer rate Common impellers: Rushton turbine, marine propeller Speed controlled by motor Prevents settling of cells Affects shear stress on cells Slide 6: Aeration System Supplies oxygen for aerobic fermentation Air introduced through sparger Types of spargers: ring, nozzle, sintered Maintains dissolved oxygen concentration Air is filtered for sterility Essential for high cell density cultures Slide 7: Temperature and pH Control Temperature controlled by heating/cooling jackets pH maintained using acid or alkali addition Sensors continuously monitor parameters Automated control systems used Ensures optimal microbial growth Prevents enzyme denaturation Slide 8: Foam Control System Foam formed due to protein and agitation Excess foam reduces oxygen transfer Mechanical foam breakers used Chemical antifoam agents added Foam sensor detects foam formation Maintains efficient fermentation Slide 9: Types of Bioreactors – Based on Mode of Operation Batch bioreactor Fed-batch bioreactor Continuous bioreactor Choice depends on product type Widely used in industrial fermentation Controls productivity and yield Slide 10: Batch Bioreactor All nutrients added at the beginning No addition or removal during process Simple and easy to operate Low risk of contamination Used for antibiotics and enzymes Limited control over nutrient depletion Slide 11: Fed-Batch Bioreactor Nutrients added during fermentation Prevents substrate inhibition High product yield Widely used in industrial fermentation Allows better control of growth rate Used in insulin and enzyme production Slide 12: Continuous Bioreactor Fresh medium continuously added Culture removed at same rate Maintains steady-state conditions High productivity Risk of contamination is high Used in wastewater treatment and SCP production Slide 13: Types of Bioreactors – Based on Design Stirred tank bioreactor Airlift bioreactor Bubble column bioreactor Packed bed bioreactor Fluidized bed bioreactor Photobioreactor Slide 14: Stirred Tank Bioreactor (STR) Most commonly used bioreactor Mechanical agitation using impellers Suitable for aerobic fermentation Excellent mixing and oxygen transfer Used for bacteria and fungi Easy scale-up Slide 15: Airlift Bioreactor Mixing achieved by air circulation No mechanical agitator Low shear stress Energy efficient Suitable for shear-sensitive cells Used in wastewater treatment Slide 16: Bubble Column Bioreactor Air bubbles provide mixing Simple design and low cost No moving parts Limited mixing efficiency Used for microbial fermentation Suitable for large-scale operations Slide 17: Packed Bed Bioreactor Contains immobilized cells or enzymes Substrate flows through packed matrix High cell density Used in continuous processes Limited oxygen transfer Used in enzyme and wastewater treatment Slide 18: Fluidized Bed Bioreactor Immobilized particles kept in suspension Better mass transfer than packed bed Reduced clogging Suitable for continuous operation Used in biotransformations Higher operational complexity Slide 19: Photobioreactor Designed for photosynthetic organisms Provides light source Used for algae and cyanobacteria Controls light, CO₂, and temperature Used in biofuel and pigment production Can be tubular or flat-plate design Slide 20: Applications of Bioreactors Production of antibiotics and vaccines Enzyme and organic acid production Single cell protein production Wastewater treatment Biofertilizer and biopesticide production Biopharmaceutical manufacturing

How is personal data collected? There are several ways that an unauthorised person can try and collect your data. These include: •phishing •smishing •vishing •pharming. Phishing Phishing is when a person sends a legitimate looking email to a user. The email contains a link to a website that also looks legitimate. The user is encouraged to click the link and to input personal data into a form on the website. The email could also simply ask the user to reply to the email with their personal data. The user is tricked into giving their personal data to a source that they believe is legitimate. However, both the email and the linked website are from a fake unauthorised source. The personal data that is input is then collected by an unauthorised person. This person can then use this data for criminal acts, for example, to commit fraud or steal the person's identity. Intimidation has become a common feature of phishing emails, threatening the user that they must click the link and rectify a situation immediately, or there will be a further issue. The aim of a phishing attack is to steal the user's personal data. Figure 5.1: Phishing. A real-life example of phishing PayPal have been the subject of several different phishing emails. Users receive an email that looks as though it has been sent from PayPal, as it has the PayPal branding. The email normally warns of an issue such as unexpected activity on their account, or that some kind of verification of their account is required. The user is then asked to click a link to log into their account and resolve the issue. The link takes them to a webpage that looks like the PayPal login page. If the user inputs their login details into this page, they will not be taken to their account. It is often at this stage that the user may realise that the email and webpage are fake. However, they have already given the unauthorised person their PayPal login details. Figure 5.2: An example of a phishing email claiming to be from PayPal. How to recognise phishing There are several guidelines to be aware of regarding emails to avoid being subjected to phishing. These include: •Don't even open an email that is not from a sender that you recognise or a trusted source. •Legitimate companies will never ask you for your personal data using email. Be immediately suspicious of any email that requests your personal data. •Legitimate companies will normally address you by your name. Be suspicious of any email that addresses you as ‘Dear Member' or ‘Dear Customer'. •Legitimate companies will send an email that uses their domain name. If you hover your mouse over the sender's name, it will show the email address that the email is sent from. If this does not look legitimate, for example, does not contain the correct domain name, then it is probably fake. For example, if the sender's email is user@paypal1.com rather than user@paypal.com, this is from an incorrect domain name. •Legitimate companies are protective of their professional reputation and thoroughly check any communications. They will make sure that all information given is grammatically and correctly spelt. Be suspicious of any email that contains bad grammar or spelling mistakes. •A link in an email from a legitimate company will also normally contain the domain name of the company. You can sometimes hover over the link, or right click and inspect the link, to see the address of the URL that is attached. If the URL does not contain the domain name, or also contains typical errors such as spelling mistakes, then be suspicious of this. PRACTICAL ACTIVITY 5.02 Ask a friend or a member of your family if they have ever received an email that they believed was a phishing email. Ask them how they identified it was phishing. Ask them if they know all of the given guidelines for identifying phishing emails. Smishing Smishing (or SMS phishing) is a variant of phishing that uses SMS text messages to lure the user into providing their personal details. The user is sent an SMS text message that either contains a link to a website, in the same way that phishing does, or it will ask the user to call a telephone number to resolve an urgent issue. The same advice can be followed for smishing as given for phishing. The user must question at all times any links that are sent from an unknown or suspicious user. It is advisable that if a user believes the message may be legitimate, to type in the domain name for the legitimate company website into their web browser, rather than following the link in the message. Users should block any numbers that they believe are suspicious to prevent any further risk of smishing from that number. Figure 5.3: Smishing. Vishing Vishing (or voice phishing) has the same aim as phishing, to obtain a user's personal details. The user receives a telephone call that could either be an automated system or could be a real person. An automated voice could speak to the user and advise them that an issue has occurred, such as there has been suspicious activity regarding their bank account. The user may then be asked to call another number, or just to simply press a digit and be directed to another automated system. This system will ask them to provide their bank account details to resolve the issue. The bank account details have then been obtained by the unauthorised user and can be used to commit a crime against the user. The automated system could be replaced by a real person who will try to do the same thing. They will try to convince the user that there has been an issue with an account they have and to provide the log-in details or PIN for the account to verify who they are so the issue can be resolved. The precaution to take for vishing is that no company will ever call you and ask you to provide any log-in details or PIN details over the telephone. They may ask you to provide other personal information, and if you are in doubt that the person on the other end of the phone is legitimate, it is always advisable to put the phone down and call the company back on a legitimate number that you may already know or can obtain. Figure 5.4: Vishing. Pharming Pharming is when an unauthorised user installs malicious code on a person's hard drive or server. The malicious code is designed to redirect a user to a fake website when they type in the address of a legitimate one. The fake website is designed to look like the legitimate one, to trick the user and make sure they are not aware that their request has been redirected. The user will then enter their personal details into the fake website, believing it is the legitimate one, and the unauthorised person will now have their personal data. A common technique used in pharming is called domain name server (DNS) cache poisoning. This technique exploits vulnerabilities in the DNS and diverts the internet traffic intended for a legitimate server toward a fake one instead. The unauthorised user needs to find a way to install the malicious code on the computer. They often hide the malicious code in an email attachment or link. When the user opens the email attachment or clicks the link, the malicious code is downloaded also. Figure 5.5: Pharming. The aim of a pharming attack is also to steal a user's personal data. A real-life example of pharming In 2007 50 different companies all over the world were subject to a pharming attack, these included PayPal, eBay, Barclays bank and American Express. Over a three-day period, hackers managed to infect over 1000 PCs a day with a malicious pharming code. When users who had been infected visited the websites of the different companies, they were redirected to a legitimate-looking version of the site that was designed to steal their personal data. The original email, containing the malicious code, was set up to look like a shocking news story. Users were encouraged to click a link in the email to find out more information. The code was downloaded when the user clicked the link. This was quite a sophisticated attack that required legitimate looking websites to be set up for a large number of companies. It is not known how much money the hackers were able to retrieve as a result. How to prevent pharming All of the guidelines to avoid being subjected to phishing are also relevant for recognising pharming. There are also several other precautions that can be taken to check for pharming attacks. These include: •Have a firewall installed and operational. A firewall monitors incoming and outgoing traffic from your computer. It checks this traffic against set criteria and will flag and stop any traffic that does not meet the criteria. A firewall could detect and block suspicious traffic, such as a malicious code trying to enter your system. •Have an anti-virus program installed that is designed to detect malicious pharming code. You need to scan your computer on a regular basis to check for any malicious code. It is advisable to set up an automatic scan on a daily basis at a time when your computer will normally be switched on. •Be aware when using public Wi-Fi connections. A hacker could look to directly access your computer and install the malicious code if you are connected to a public Wi-Fi connection. It is often advisable to use a VPN when using public Wi-Fi. This will help shield your internet activity and personal details from a hacker, making it more difficult for them to access your computer. Smishing can also be used as a form of pharming. A user is sent a link, that when they click is designed to download malware onto their mobile device. Therefore, it is advisable to have security software installed on your mobile and also scan it regularly to detect any presence of malware.

Discuss hazards and risks in farm operations

Measuring the Effectiveness of police strategies and operations Clearance rates Def: The proportion of incidents known to the police that result in teh identification of a suspect Crime Displacement Def: relocation-due to the effective crime prevention, crime response initiates criminal activity from one local to another Professional Model of Policing Model of police work, reactive, incident driven and centred on random patrol Three Rs: random patrol, rapid response and reactive investigation Community policing Def: policing centred on police-community partnership and problem-solving The three ps: prevention, problem solving and partnership with the proactive role Community-based strategic policing Def: The model incorporates community policing with prevention, crime response and crime attack approaches Community engagement, police services strategic in their policies and operations Crime Analytics Sophisticated programs, and crime maps, provide intelligence to police officers in patrol and investigative units Intelligence-led policing: guided by collection, and analysis of information informs police decision-making Compstat: Increase effectiveness, and efficiency of police service while holding police personnel accountable for crime reduction Predictive policing: statistical analysis, identify time and location likely to occur Limited analytical capacity and not able to provide their officers with real-time information Biased policing certain areas, or persons, being identified as important for police attention in predictive policing How Predictive Policing Software Works The Police and the community Public Attitudes toward and Confidence in the police Community-based strategic policing: Recruitment, and deployment of volunteers in community police stations, storefronts Foot and bike patrols Team policing Restorative Justice Approaches Alternative for addressing, and resolving crime, needs of victims, offenders and the community Victim offender meditation Circle sentencing Community holistic healing programss Family group conferences Crime Prevention and Response Strategies Crime Prevention progemas Aimed at reducing crime, generating community involvement and heightening citizens; perceptions of safety Primary crime prevention programs opportunities for criminal offences and alter those conditions Secondary crime prevention programs focus on areas that produce crime and disorder Tertiary crime prevention programs are designed to prevent youth and adults from reoffending The Broken Windows Approach If minor crimes are left unaddressed in an environment, more serious crimes will emerge (originated in New York City in the 1980’s) “The exictsnce of unchecked and uncontrolled mirror incivilites in a neighbourhood- for example, panhandling, public drunkenness, vandalism and graffiti-produces an atmosphere conducive to more serious crime.” R.H. Burke Zero tolerance policing Zero tolerance policing: Strict order maintenance approach- specific area, coupled with high police visibility and presence Quality of life policing: Increased police visibility improves conditions in an area by targeting disruptive and annoying behaviour Problem Oritented policing (POP) Strategy, the idea that police should address teh cause of recurrent crime and disorder Root causes of recurring problems Solutions to problems Collabortaion with community SARA (scanning, analysis, response and assessment) problem-solving model helps officers identify, and respond to problems with the assistance of agencies, organizations, community groups The Police and Vulnerable/ At risk groups Persons with Mental Illness Patrol officers encountering more and more persons with mental illness (PwMi) Number of these end trragically Number of incidents increased significantly following deinstitutionalization of the mentally ill - in 1960 and 1970 De facto (in fact) mental health workers, first responders Crisis intervention training (CIT) Assertive outreach teams Assertive community treatment (ACT) teams Indigenouse, Vulnerable, and Marginalized women Sexual assault one of most underreported crimed. 1 in 20 incidents report to police. Many Women Do not want to deal with police Believe police would not take allegation seriously Language, cultural barriers Distrust the police Fear repercussions Missing and Murdered Indigenous women Canada, unknown number of missing and murdered indigenous women 2016, federal government announced National inquiry into Missing and Murdered Indigennouse women and girls Three goals of MMIWG 1. Finding the truth 2. Honouring the truth 3. Giving life to the truth as a path of healing

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