,1. Multiple Choice: Which of the following is not a component of
the COSO Enterprise Risk Management Framework?
a) Risk Assessment
b) Information and Communication
c) Financial Reporting
d) Event Identification
Correct Answer: c) Financial Reporting
Rationale: The COSO framework includes eight components,
but Financial Reporting is not one of them; it is an outcome of
good enterprise risk management.
2. Fill-in-the-Blank: The process of ___________ involves the
prioritization of risks based on their probability of occurrence and
impact.
Correct Answer: Risk Ranking
Rationale: Risk ranking is the process where risks are prioritized
based on their likelihood and potential impact on the organization.
, Rationale: Risk tolerance is the general level of risk that an
organization is willing to accept, but it is not an exact measure. It is
more of a range or a threshold.
4. Multiple Response: Select all that apply. Which of the following
are typically included in a risk register?
a) Risk description
b) Risk owner
c) Control measures
d) Financial impact
Correct Answers: a) Risk description, b) Risk owner, c) Control
measures
Rationale: A risk register typically includes the risk description,
the risk owner, and the control measures. The financial impact is
usually documented in a separate financial analysis.
, Rationale: Avoidance is a risk response strategy that involves
taking actions to remove the risk entirely.
6. Fill-in-the-Blank: ___________ risk refers to the uncertainty
surrounding changes in the value of assets due to market
fluctuations.
Correct Answer: Market
Rationale: Market risk is the potential for investors to experience
losses due to factors that affect the overall performance of the
financial markets.
7. True/False: A 'black swan' event is a predictable, high-frequency
occurrence with moderate impact.
Correct Answer: False
Rationale: A 'black swan' event is an unpredictable event that is
beyond what is normally expected of a situation and has potentially
severe consequences.
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