Risk Management (100% Accurate answers)

Risk position correct answers Organization's desired gain or acceptable loss in value Residual risk correct answers Amount of uncertainty that remains after all risk management efforts have been exhausted. Annualized loss expectancy (ALE) correct answers Expected monetary loss for an asset due to a risk over a one-year period; calculated by multiplying single loss expectancy by annualized rate of occurrence. Key risk indicators (KRIs) correct answers Metrics that provide an early signal of increasing risk exposures for an enterprise. Hazard correct answers Potential for harm, often associated with a condition or activity that, if left uncontrolled, can result in injury or illness. Risk control correct answers Action taken to manage a risk. Risk tolerance correct answers Amount of uncertainty an organization is willing to pursue or to accept to attain its risk management goals. Risk correct answers Uncertainty that has an effect on an objective, where outcomes may include opportunities, losses, and threats. Risk appetite correct answers Amount of uncertainty an organization is willing to pursue or to accept to attain its risk management goals. Single loss expectancy (SLE) correct answers Expected monetary loss every time a risk occurs; calculated by multiplying asset value by exposure factor. Whistleblowing correct answers Reporting of an organization's violations of policies and processes by employees. Moral hazard correct answers Situation in which one party engages in risky behavior knowing that it is protected against the risk because another party will incur any resulting loss. Risk scorecard correct answers Tool used to gather individual assessments of various characteristics of risk (e.g., frequency of occurrence; degree of impact, loss, or gain for the organization; degree of efficacy of current controls). Principal-agent problem correct answers Situation in which an agent (e.g., an employee) makes decisions for a principal (e.g., an employer) potentially on the basis of personal incentives that may not be aligned with the principal's incentives.