BB42 Risk Management Vocabulary

Risk monitoring and control

• A process that involves identifying potential risks before they occur.

• A risk-management process that involves determining the effectiveness of current risk-response strategies and tools, tracking existing risks, monitoring new risks, and developing responses and workarounds for previously unidentified risks.

• A method for eliminating all risks associated with a project.

• A strategy focused solely on financial risks and their mitigation.

Risk management

• A process to maximize profits by minimizing costs

• A business activity that involves the planning, controlling, preventing, and limiting of business losses and enhancing possibilities for gain

• A strategy to eliminate all business risks

• A method to increase competition in the market

Credit downgrade

• The increase of a business’s credit rating or measure of relative credit risk; usually accompanied by a decrease in expenses and an increase in creditworthiness

• The reduction of a business’s credit rating or measure of relative credit risk; usually accompanied by an increase in expenses and a decrease in creditworthiness

• The stabilization of a business’s credit rating or measure of relative credit risk; usually accompanied by no change in expenses and creditworthiness

• The fluctuation of a business’s credit rating or measure of relative credit risk; usually accompanied by an unpredictable change in expenses and creditworthiness

Risk identification

• A process of recognizing risks that could impact a business’s objectives and activities

• A method for evaluating the financial performance of a business

• A strategy for increasing market share through aggressive marketing

• A technique for improving employee productivity and satisfaction

Incident log

• A record of accidents, injuries, and other mishaps occurring at a particular business or in a certain department

• A summary of daily sales and transactions in a retail store

• A list of employee attendance and punctuality records

• A documentation of customer feedback and complaints

Risk impact/probability chart

• A tool for measuring financial performance

• A framework used to determine the severity of risks if they occur; used by risk managers to prioritize risks

• A method for calculating project timelines

• A chart for visualizing team performance

Probability

• The chance of winning a game

• The likelihood that an event will occur

• The total number of outcomes

• The measure of uncertainty in a situation

Risk-seeking

• Looking for ways to turn risk into a strategic advantage and/or capital

• Avoiding risks to ensure stability

• Minimizing potential losses at all costs

• Taking calculated risks without any strategy

Acceptance

• A risk-response strategy that involves avoiding risks entirely

• A risk-response strategy that involves transferring risks to another party

• A risk-response strategy that involves accepting a risk’s consequences because the potential payoff is higher than the losses

• A risk-response strategy that involves mitigating risks through various controls

Exchange rate

• The price or value at which one currency can be converted to another

• A measure of a country's economic growth

• The interest rate set by a central bank

• The total amount of money in circulation