3.01 Business Management II BB42

The term risk is used in business to refer to the

• possibility of loss or gain

• chances that consumers take

• uncontrollable possibility of danger

• mistakes that employees make

An earthquake is an example of a _________________ risk.

• strategic

• operational

• speculative

• pure

What do risk managers need to do to help their company successfully launch a new product?

• Evaluate the potential gains and losses of the launch

• Ignore risks the company has encountered in the past

• Develop fail-proof risk management strategies

• Act quickly to beat the company's competition

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

• Tornadoes

• Product Shortages

• Inflation

• Competition

An example of an internal financial risk is

• foreign exchange rate changes

• improper budgeting practices

• consumer buying power

• credit downgrades

Poor product development, unreliable manufacturing equipment, and product shortages are examples of __________ risks.

• strategic

• hazard

• financial

• operational

What category of risk typically has the most impact on a business's ability to reach its goals and objectives?

• Strategic

• Hazard

• Financial

• Operational

Technological innovations can increase strategic risk for business by

• decreasing the supply of people seeking employment

• causing interest rate increases

• making some products obsolete

• eliminating the convenience of buying in person

A good source of information about a business's retroactive risks would be a(n)

• environmental scan

• business incident log

• local weather forecast

• purchasing manager

Which of the following statements accurately explains the nature of prospective risks?

• They have not happened before but could occur in the future

• They are typically more common than retroactive risks

• They are usually easier to identify than retroactive risks

• They occurred in the past and could occur again in the future