9-1 Risk Management Fundamentals

What is pure risk?

• A risk associated with investing in new technology

• A risk that is generally not insurable

• A risk with a possibility of loss or no change, with no potential for gain

• A risk with a possibility of loss, no change, or gain

Which of the following is an example of market risk?

• Exchange rates

• Employee turnover

• Product defects

• Data breaches

What is the primary goal of risk management?

• To ensure maximum financial returns

• To eliminate all risks

• To avoid entering new markets

• To identify and predict risks and take proactive measures

Which type of risk is associated with poor strategic decisions?

• Operational risk

• Market risk

• Strategic risk

• Financial risk

What is a risk register?

• A database that lists all identified risks and how to manage them

• A strategy to enter new markets

• A tool to eliminate risks

• A method to increase financial returns

Which of the following is a characteristic of speculative risk?

• It is generally insurable

• It involves uncertainty and choice

• It is predictable and measurable

• It only involves the possibility of loss

What is the purpose of a risk matrix?

• To plot risk assessments based on likelihood and impact

• To increase market share

• To eliminate all risks

• To ensure compliance with legal standards

Which of the following is an example of operational risk?

• Inflation

• Supply chain interruptions

• Exchange rates

• Regulatory changes

What is a risk mitigation strategy?

• A strategy to accept all risks

• A strategy to avoid entering new markets

• A strategy to lessen the impact of certain risks

• A strategy to transfer risk to another party

What is the first step in the risk management process?

• Identifying risks

• Assessing risks

• Monitoring risks

• Responding to risks