BB42 Risk Review

The term risk is used in business to refer to the

• mistakes that employees make.

• possibility of loss or gain.

• chances that consumers take.

• uncontrollable possibility of danger.

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

• develop fail proof risk management strategies

• ignore risks the company has encountered in the past

• evaluate the potential gains and losses of the launch

• act quicklly to beat the company's competition

An example of internal financial risk is

• foreign exchange rate changes.

• consumer buying power.

• credit downgrades.

• improper budgeting practices.

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

• strategic

• hazard

• operational

• financial

Technological innovations can increase strategic risk for business by

• causing interest rate increases.

• making some products obsolete.

• eliminating the convenience of buying in person.

• decreasing the supply of people seeking employment.

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

• business incident log.

• environmental scan.

• local weather forecast.

• purchasing manager.

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

• they are typically more common than retroactive risks

• they have occurred in the past and could occur again in the future

• they are usually easier to identify than retroactive risks

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

The two dimensions of risk are

• mitigation and acceptance.

• impact and avoidance.

• probability and avoidance.

• probability and impact.

Which of the following is often used to measure and rate potential risks?

• contingency and fallback plans

• a risk impact/probability chart

• transference strategies

• an environmental scan

A common transference device is a(n)

• smoke alarm.

• insurance policy.

• risk checklist.

• contingency plan.