If a loss has a criticality rating of 2, what is its expected impact on the balance sheet?

The correct answer indicates that a loss with a criticality rating of 2 will necessitate a major change in investment policy. This rating suggests a significant level of impact on an organization's operations or financial health. In the context of balance sheet management, a criticality rating of 2 typically implies that the loss is substantial enough to influence strategic decisions about resource allocation, risk management, and overall business continuity.

The impact is notably beyond minimal adjustments or trivial effects, indicating that the organization must actively reconsider its investment strategies and possibly shift priorities to mitigate the consequences of the loss. This might include diversifying investments, reallocating assets, or even revisiting risk management frameworks to ensure financial stability.

In terms of organizational response, the necessity for a major change reflects an understanding that financial resilience and strategic adaptability are paramount in addressing losses that could otherwise jeopardize the company's objectives and stakeholder interests. By viewing the loss through the lens of criticality, decision-makers can prioritize actions that align with maintaining operational effectiveness and financial integrity.