Risk Management Quiz

Which two dimensions do risks have?

• probability and avoidance

• probability and impact

• impact and avoidance

• mitigation and acceptance

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

• damaged reputation

• increased credit rating

• inflated profit margin

• decreased conflict

How can the business risks be reduced if the business transfers the risk to another business?

• purchasing insurance

• installing burglar alarms

• employing security guards

• hiring a risk specialist

How can technological innovations can increase the strategic risk for businesses?

• eliminating the convenience of buying in person

• decreasing the supply of people seeking employment

• causing interest rate growth

• making some products obsolete

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

• business incident log.

• purchasing manager.

• local weather forecast.

• environmental scan.

Technological innovations can increase strategic risk for business by

• eliminating the convenience of buying in person.

• decreasing the supply of people seeking employment.

• making some products obsolete.

• causing interest rate increases.

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

• Strategic

• Operational

• Hazard

• Financial

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

• hazard

• operational

• financial

• strategic

An example of an internal financial risk is

• credit downgrades.

• foreign exchange rate changes.

• consumer buying power.

• improper budgeting practices.

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

• Act quickly to beat the company's competition

• Ignore risks the company has encountered in the past

• Develop fail-proof risk-management strategies

• Evaluate the potential gains and losses of the launch