1. What does the term "hazard risk" refer to in risk management?
A. Risks that result from economic changes
B. Risks that arise from the environment, such as natural disasters
C. Risks caused by human error or negligence
D. Risks related to competition in the market
Answer: b) Risks that arise from the environment, such as natural
disasters
Rationale: Hazard risks are typically associated with external,
environmental events such as natural disasters, fires, or accidents
that pose a risk to a business.
2. In the risk management process, which of the following best
describes "risk assessment"?
A. Estimating the likelihood and impact of identified risks
B. Identifying the risks associated with a particular activity
C. Allocating resources to manage the risks
D. Avoiding risks by changing the operational strategy
Answer: a) Estimating the likelihood and impact of identified risks
Rationale: Risk assessment involves evaluating the probability of
each risk occurring and the potential severity of its consequences
to prioritize and decide on the appropriate response.
,3. In risk management, which of the following best describes "risk
avoidance"?
A. Transferring the risk to another party
B. Reducing the likelihood of the risk occurring
C. Taking steps to eliminate the risk altogether
D. Accepting the risk and managing the consequences
Answer: c) Taking steps to eliminate the risk altogether
Rationale: Risk avoidance involves completely eliminating the
possibility of the risk from occurring by changing the business
strategy or processes. For example, discontinuing a hazardous
operation to avoid the associated risks.
4. Which of the following is an example of a "hazard risk" in a
manufacturing company?
A. An employee filing a workers’ compensation claim for a
workplace injury
B. A competitor offering a similar product at a lower price
C. A change in consumer preferences impacting demand for the
product
D. A delay in raw material supply due to a trade embargo
Answer: a) An employee filing a workers’ compensation claim for a
workplace injury
, Rationale: Hazard risks are related to accidents or events that
result in harm to people, property, or the environment, such as
workplace injuries.
5. In the context of operational risks, which of the following
would be an example of a "systemic risk"?
A. A breakdown in the company's IT infrastructure
B. A fire that destroys a company’s manufacturing plant
C. A natural disaster disrupting the entire supply chain
D. A cyber-attack targeting customer data
Answer: c) A natural disaster disrupting the entire supply chain
Rationale: Systemic risks are risks that affect the broader system
or environment in which the business operates, such as a natural
disaster that disrupts the supply chain.
6. Which of the following would most likely require an
organization to implement "crisis management" strategies?
A. A decline in employee morale
B. A major product recall due to safety issues
C. A minor system error in the IT department
D. A change in government tax policies
Answer: b) A major product recall due to safety issues
A. Risks that result from economic changes
B. Risks that arise from the environment, such as natural disasters
C. Risks caused by human error or negligence
D. Risks related to competition in the market
Answer: b) Risks that arise from the environment, such as natural
disasters
Rationale: Hazard risks are typically associated with external,
environmental events such as natural disasters, fires, or accidents
that pose a risk to a business.
2. In the risk management process, which of the following best
describes "risk assessment"?
A. Estimating the likelihood and impact of identified risks
B. Identifying the risks associated with a particular activity
C. Allocating resources to manage the risks
D. Avoiding risks by changing the operational strategy
Answer: a) Estimating the likelihood and impact of identified risks
Rationale: Risk assessment involves evaluating the probability of
each risk occurring and the potential severity of its consequences
to prioritize and decide on the appropriate response.
,3. In risk management, which of the following best describes "risk
avoidance"?
A. Transferring the risk to another party
B. Reducing the likelihood of the risk occurring
C. Taking steps to eliminate the risk altogether
D. Accepting the risk and managing the consequences
Answer: c) Taking steps to eliminate the risk altogether
Rationale: Risk avoidance involves completely eliminating the
possibility of the risk from occurring by changing the business
strategy or processes. For example, discontinuing a hazardous
operation to avoid the associated risks.
4. Which of the following is an example of a "hazard risk" in a
manufacturing company?
A. An employee filing a workers’ compensation claim for a
workplace injury
B. A competitor offering a similar product at a lower price
C. A change in consumer preferences impacting demand for the
product
D. A delay in raw material supply due to a trade embargo
Answer: a) An employee filing a workers’ compensation claim for a
workplace injury
, Rationale: Hazard risks are related to accidents or events that
result in harm to people, property, or the environment, such as
workplace injuries.
5. In the context of operational risks, which of the following
would be an example of a "systemic risk"?
A. A breakdown in the company's IT infrastructure
B. A fire that destroys a company’s manufacturing plant
C. A natural disaster disrupting the entire supply chain
D. A cyber-attack targeting customer data
Answer: c) A natural disaster disrupting the entire supply chain
Rationale: Systemic risks are risks that affect the broader system
or environment in which the business operates, such as a natural
disaster that disrupts the supply chain.
6. Which of the following would most likely require an
organization to implement "crisis management" strategies?
A. A decline in employee morale
B. A major product recall due to safety issues
C. A minor system error in the IT department
D. A change in government tax policies
Answer: b) A major product recall due to safety issues
