Risk Management

When are business risks generally greatest for a business?

• When experiencing an anniversary

• During the holiday seasons

• When a business first begins operation

• During the summer months

Financial risk is necessary because sometimes greater financial risk equals which of the following?

• Less risk of other types

• Greater products and services

• Better management

• Greater financial reward

Carol opened a movie rental store a few years ago, and due to new, more convenient movie rental options, her business is failing. This is an example of a business owner failing due to which type of risk?

• Natural risk

• Financial risk

• Economic risk

• Human risk

Which of the following is an example of a risk source?

• Money in the cash register

• A business's products

• Insurance coverage

• Employees of a company

Risks can be assessed by which of the following equations?

• Risk = weakness-expectation-insurance

• Risk = uncertainty divided by preparation

• Risk = probability x impact

Which technique for dealing with risk often involves the purchasing of insurance?

• Risk transfer

• Risk reduction

• Risk retention

• Risk avoidance

Marshall's business experiences a lot of theft so he has installed security cameras in his store and security devices in his merchandise. Which technique for dealing with risk is Marshall applying to his risk of theft?

• Risk transfer

• Risk reduction

• Risk retention

• Risk avoidance

Which of the following is an example of risk avoidance?

• Purchasing insurance policies

• Installing security cameras

• Training employees

• Running a background check on employees

Which of the following is NOT one of the four types of risk?

• Natural

• Political

• Human

• Economical

Risks associated with the environment, include hurricanes, earthquakes, tornados, etc.

• Economic risks

• Financial risks

• Human risks

• Natural risks