Risk Management Multiple Choice Questions

Upside risk is best interpreted as the possibility of:

• Possibility of loss

• Possibility of gain

• Financial crisis

• Operational failure

Risks arising from employee fraud can be classified under:

• External risks

• Strategic risks

• Internal risks

• Market risks

Exchange rate fluctuations contribute to risk in international operations by:

• Internal risk

• Compliance risk

• Operational risk

• International risk

Strategic risks are associated with:

• Day-to-day operations

• Long-term business decisions

• Employee behavior

• Accounting errors

Risk maps are used in organizations for the purpose of:

• Rank risks based on impact and likelihood

• Eliminate risks

• Record financial data

• Audit processes

Operational risks arise in organizations due to:

• Government policy changes

• Exchange rate changes

• Internal processes and systems

• Competitor actions

Risk exposure in an organization can be measured by:

• Ignoring uncertainties

• Eliminating all risks

• Avoiding all risks

• Measuring potential loss or gain

The responsibility for overseeing risk management in an organization lies with:

• Employees

• Board of Directors

• Customers

• Suppliers

The TARA approach in risk management is applied to:

• Transfer, Avoid, Reduce, Accept

• Track, Assess, Record, Apply

• Transfer, Allocate, Review, Approve

• Test, Avoid, Reduce, Analyze

Risk transfer as a strategy involves:

• Ignoring risk

• Accepting risk fully

• Eliminating risk completely

• Shifting risk to another party