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ERM

Total questions: 10

Worksheet time: 6mins

Name
Class
Date
1.

Risks that an organization may face related to short-term and long-term debt and equity decisions are commonly called:

a)

Operational Risks

b)

Hazard Risks

c)

Financial Risks

d)

Strategic Risks

2.

The risk that remains after all attempts management might take to it is commonly called:

a)

Inherent risk

b)

Risk of loss

c)

Residual risk

d)

Operational risk

3.

A Belgian clothing retailer sells its products mainly to online customers worldwide. The company management believes that its primary risk relates to problems with its online website. A secondary risk is the exchange rate volatility. Which two of the following best describe the risks described by the management?

a)

Strategic risk

b)

Financial risk

c)

Operational risk

d)

Business risk

4.

When purchasing temporary investments, which one of the following best describes the risk associated with the ability to sell the investment in a short period of time without significant price concessions?

a)

Credit risk

b)

Price risk

c)

Financial risk

d)

Liquidity risk

5.

Which of the following principle(s) support(s) the governance and culture component of COSO's ERM framework?

a)

Exercise board oversight

b)

Defines risk appetite

c)

Commitment to core values

d)

Defines desired culture

e)

Analyzes business context

6.

Which is not a key step in the Risk Management Process?

a)

Implement risk management strategy

b)

Determine risk tolerance

c)

Evaluate capital reserves

d)

Evaluate risk exposure

7.

A risk-averse management team typically

a)

does not prioritize mitigation of risk

b)

is not willing to spend time to mitigate risk

c)

is not willing to spend money to reduce risk

d)

does not mind spending money to mitigate risk

8.

A company chooses to "self-insure" its properties due to the staggeringly high cost of insurance. This is an example of

a)

risk sharing

b)

risk reduction

c)

risk avoidance

d)

risk acceptance

9.

Risks that relate to losses from inadequate or failed internal processes, people and systems are commonly called

a)

Hazard risk

b)

Financial risk

c)

Operational risk

d)

Strategic risk

10.

Each of the following components is part of enterprise risk management, except for

a)

Strategy and objective-setting

b)

Performance

c)

Review and revision

d)

Control environment