Business Management II Unit 3 (2023)

Risks that are caused by changes in the market and affect the production and distribution of products are called:

• human risks

• economic risks

• marketing risks

• environmental risks

Which is an example of an economic risk?

• competition

• dishonesty

• perishability

• tornado

A good source of information about a business's retroactive risks would be a/an:

• environmental scan

• purchasing manager

• business incident log

• local weather forecast

An example of an internal financial risk is:

• credit downgrades

• consumer buying power

• improper budgeting practices

• foreign exchange rate changes

To control the business's level of risk, management needs to clearly communicate the business's code of ethics to employees because:

• the government requires all businesses to provide in-depth ethics training programs.

• business policies tend to change in terms of what is considered ethical behavior.

• businesses neglect to address ethical issues in their employee handbooks.

• the employees' personal ethics may differ from the business's ethics.

The impact of some business risks can be reduced if the business transfers the risk to another business by:

• purchasing insurance

• hiring a risk specialist

• installing burglar alarms

• employing security guards

Which type of risk is caused by electrical storms, floods, and earthquakes?

• economic

• human

• marketing

• natural

What is a negative consequence for a business that neglects to manage risk by failing to implement an ethics training program for employees?

• decreased conflict

• damaged reputation

• inflated profit margin

• increased credit rating

What type of risk is an earthquake?

• operational

• pure

• speculative

• strategic

The two dimensions of risk are:

• impact and avoidance

• probability and impact

• probability and avoidance

• mitigation and acceptance