Week 2 (2nd Quarter) Classwork -Risk Management

1. What is the primary goal of financial risk management?

• a) Maximize returns
  

• b) Minimize expenses
  

• c) Identify, measure, and manage risks to reduce financial losses
  

• d) Increase revenue

  
  

2. Which of the following is an example of operational risk?

• a) Changes in interest rates

• b) A factory fire

• c) A competitor releasing a new product

• 
  d) A negative news article about the company

3. What is strategic risk?

• a) Risk arising from day-to-day operations

• b) Risk related to external market conditions

• c) Risk arising from poor business decisions

• d) Risk due to fluctuations in exchange rates

4. Reputational risk is best defined as:

• a) The risk of financial loss from lawsuits

• b) The risk of negative public opinion harming the business

• c) The risk of competitors entering the market

• d) The risk associated with failing to meet regulatory standards

5. Which of the following is NOT a method to mitigate financial risk?

• a) Hedging

• b) Diversification

• c) Risk acceptance

• d) Regulatory compliance

6. Operational risk can be best managed by:

• a) Investing in new products

• b) Implementing strong internal controls

• c) Monitoring stock market trends

• d) Expanding into new markets

7. What type of risk is a company exposed to when its strategies are not aligned with market trends?

• a) Financial risk

• b) Operational risk

• c) Strategic risk

• d) Reputational risk

8. A company’s failure to comply with data protection laws would result in which type of risk?

• a) Operational risk

• b) Reputational risk

• c) Financial risk

• d) Strategic risk

9. Which risk is most likely to result from a sudden drop in stock prices?

• a) Operational risk

• b) Financial risk

• c) Strategic risk

• d) Reputational risk

10. Which of the following is an example of strategic risk mitigation?

• a) Investing in competitor analysis

• b) Implementing a fire prevention plan

• c) Monitoring regulatory changes

• d) Securing insurance coverage for key assets