1)

Risk appetite is the aggregate levels and types of risk that an organisation is willing to take within its risky capacity.It is a critical tool for effective decision making and project performance management and therefore it should be driven by the top management.

The overall approach including policies, process, limits, controls and systems through which the operational risk appetite is established, communicated and monitored must be planned and implemented by top management.The expectations about how this framework will work strike at the heart of how organisations manage their businesses.At the highest level, the risk appetite framework must be alligned with the business plan and strategy. In other words, in setting the annual plan, the board and management must consider whether it is consistent with the risk appetite, and any significant changes in strategy need to be assesed against risk appetite.However, going far beyond this, a common framework of measures must be agreed upon and communicated and then spread through the organisation to guide individual decisions on a day to day basis.

The senior management must involved in the setting of operatioanl risk appetite which includes incorporating risk appetite in compensation, day to day operations, decision making processes as well as ensuring that business planning is consistant with it and that new products are assessed against it, along with atrategic changes such as mergers.In addition, capital management must be appropriate given the risk appetite.Some of the major responsibilities of top management in relation to risk appetite are the following:

1) Establish a prudent risk appetite that is consistent with the firm's short and long term strategy, business and capital plans, risk capacity and compensation programs and align it with supervisory expectations.

2) Be accountable, together with the business lines, for the integrity of the risk appetite framework, including the timely identification and escalation of breaches in risk limits and of material risk exposures.

3) Ensure that the risk appetite is appropriately translated into risk limits for business lines and legal entities, and that business lines and legal entities incorporate risk appetite into their strategic and financial planning, decision making process and compensation decisions.

4) Provide leadership in communicating risk appetite to internal and external stakeholders so as to help embed prudent risk taking into the firm's risk culture.

5) Independently monitor business line and legal entity risk limits and the firm's aggregate risk profile to ensure they remain consistent with the firm's risk appetite.

2)

Market Value of Firm =Market Capitalization value

Market Capitalization value = Current Market Price * Toatal Equity Shares Outstanding

Current Market Price is the price at which Listed company's shares/stock is trading in securities market , that is the price that the market believes the company is worth, determined by demand and supply criteria.

Book Value = Total Assets - Total Liabilities - Intangible Assets.

So, Book value also refers as Net assets ,it actually represents total value of Company's assets that the equity shareholders of the company will receive, when the company is to be liquidated . The Book value is computed with the help of Balance Sheet of the Firm.

whereas Market Value represents the value of firm,s equity in the Securities market.

Now, Market to Book Ratio = Market value / Book value of firm

Through this ratio , investors can compare the market value and the book value of the Equity stock.

It denotes how much equity investors are paying (in securities market ) for each dollar in net assets /book value

So, it is an financial valuation metric because it helps an investor in interpreting the following with respect to investment made by him

LOW RATIO (Less than 1 ) ; indicate that the stock is undervalued thus we can conclude that this is a bad investment by the investor so, give investor negative impression that he is paying more than what he will be getting in case the company gets bankrupt or liquidated.

HIGHER RATIO (Greater than 1 ) , indicate that stock is overvalued means the company is performing so well .

This ratio is best if Maret to Book value ratios are compared between the companies within the same industry.

So, Comparing the Market to Book ratios for 2 companies , which of the firm can be considered as GROWTH FIRM and which one VALUE FIRM :

Book value of Company Mondelez International Inc. CI A is negative in all the 4 years which results in Negative Market to book ratio

On, the other hand , Book value of company Hewlett Packard Enterprise Co.is p.ositive in last 3 year but negative in 2019.

So, company Hewlett Packard Enterprise Co. is a Growth Firm because here , Market Value is Higher than the book value and company fundamentally also performing well on an average basis this is the reason stock of the company is overvalued .

Company Mondelez International Inc. CI A, is a Value Firm . Because Commpany has Negative Book Value/ Net assets in all the 4 years and that is due to High share of Intangible assets in the company as compared to company Hewlett Packard Enterprise Co but since the company EPS is relatively good , so Mondelez International Inc. CI A, is a Value Firm because the ratio is low & negative which is due to negative book value, indicates stock of the company is undervalued.

Note : In the Question , we have been given the Market Value of the companies which is calculated by mul.tip.lying the Current Market Price with the Oustanding no of Equity shares. I.n question Oustanding no of shares is given , but the Current market price is calculated by using Price to earning ratio (Market price per share / Earning per share), so earning per share(EPS) is given in question.

Thus with the help. of P.rice Earning ration and EPS , market price is calculated.