Govrisk Quiz - Chapter 11

The risk that the real rate of return will be lesser than the nominal or stated rate of return due to inflation is referred to as

• a. Purchasing Power Risk

• b. Liquidity Risk

• c. Default Risk

• d. Business Risk

This includes risk planning, assessing risk areas, developing risk handling options, monitoring risks to determine how risks have changed and documenting overall risk management program.

The technique of eliminating or reducing risk which could mean losing out on the potential gain is called

• a. Risk sharing

• b. Risk retention

• c. Risk avoidance

• d. Risk reduction

Ideal risk management should minimize spending of manpower or other resources and at the same time minimizing the negative effect of risks.

• TRUE

• FALSE

ISO 31000 suggests that once risks have been identified and assessed, techniques to manage the risks should be applied. These techniques include the following except

• a. Retention

• b. Complete disregard

• c. Reduction

• d. Sharing

The Board should not oversee that a sound enterprise risk management (ERM) framework is in place to effectively identify, monitor, assess and manage key business risks.

• TRUE

• FALSE

The risk associated with the uncertainty created by the inability to turn investment quickly for cash

According to the Standard ISO 31000 "Risk management - Principles and Guidelines on Implementation, "the process of risk management consists of several steps including the following except

• a. Establishing the context

• b. Identification of potential risks

• c. Risk assessment

• d. Risk retention

At least one member of the committee must have relevant thorough knowledge and experience on risk and risk management.

• TRUE

• FALSE

Operations risk is manifested in all of the following except

• a. Interest rates volatility

• b. Process stoppage

• c. Technological obsolescence

• d. Management fraud