1) One of your newer clients is the Senior Lending Officer of a local bank. He is new to his position and does not have a lot of experience in risk management. You plan to meet with him over lunch to bring him up to speed on what he has to know about risk, particularly in the case of a bank.

Discuss the following specific points:

• Give an example of measuring the transaction risk of an international business transaction.
• Among transaction, enterprise, and systemic risk, which does the Lending Officer have the most control over/least control over.
• What exactly can the Lending Officer do to mitigate the risks of systemic risk and enterprise risk?

2) As a recently promoted manager, you are learning about the importance of basing important decisions on good assumptions; you thought you would practice by thinking through some major decisions that have been made and what the assumptions that the decisions were based upon must have been.

Research and find two situations in which decisions were made. For each situation, describe the likely assumptions that were made prior to each decision. Do you feel the decision was a good one? Why or why not?