2.3 - Risk Management

Question 1

What is a risk?

Answer 1

The possible variation in an outcome from what is expected to happen. and will adversely affect the achievement of objectives.

Question 2

What is uncertainty?

Answer 2

the inability to predict the outcome from an activity due to a lack of infomation

Question 3

Downside risk is?

Answer 3

the risk that something will go wrong

Question 4

Upside Risk is?

Answer 4

if it is likely that things will go right

Question 5

Pure risk is?

Answer 5

Possibility that something could go wrong

Question 6

Speculative risk is?

Answer 6

possiblity that something could go better than expected

Question 7

What is an oppertunity?

Answer 7

the possibilty that an event will occur and positively affect the achievement objectives.

Question 8

What are the risks for investors?

Answer 8

Lenders - fail to make interest payamnets or pay loan principle
Stakeholders - if the company becomes insolvent they will loose all their investment. (carry the ultimate risk)

Question 9

what is a risk appitite?

Answer 9

the extent to whoch businness in preapred to take risks in order to achieve objectives

Question 10

what are the 3 attitdes to risk?

Answer 10

Risk Adverse
Rsk neutral
Risk seeking

Question 11

What does Risk Adverse mean?

Answer 11

an investment would be chosen if it has a more certain but possibly lower return that an alternative with more risk but potential higher return.

Question 12

What does Risk Neutral mean?

Answer 12

an investment is chosen according to return without considering risk at all

Question 13

What is risk seeking?

Answer 13

an investement would be chosen on the basis of it offering higher levels of risk.

Question 14

How do you Calculate expected return?

Answer 14

Epx - sum of probability times predicted annual return.

Question 15

What types of risk are there?

Answer 15

Buiness and Non-biness

non business can be financial and operational

Question 16

What are the 4 risk concepts? and what do they mean?

Answer 16

Exposure - what riska re we open to?
Volatility - are the risks going to change?
Impact - what result woudl the risk cause?
Probability - means how likely it is each risk will occur

Question 17

What is cyber risk?

Answer 17

any risk of finncial loss, disruption or manage to the reuptaion of m organisation from som sort of failure of its info technology system

Question 18

whata re the three cycber risks?

Answer 18

deilntrate breaches of secuirty
unitentional breaches of security
poor operational ingetrity

Question 19

what is cyber attack

Answer 19

a delbrerate action through the internet aginst an organisation of causing loss, damage or disruption to activities.

Question 20

What are th two types of cyber attack and what do they mean?

Answer 20

Hcking - access computuer networks by useing software and tools

DDoS - botnets onverwhlem online services by increasing internet traffic

all staff should be trained in how to respond to these

Question 21

What is cyber security?

Answer 21

the prtection of systems, networs and data in cyberspace; the procedures used by a business to protect its information system from damage, disruption or loss.

Question 22

Exmaples of cyber secuirty?

Answer 22

Access controls - passwords
Firewalls
Malware prtection
Patch management
Secure Cofiguration

Question 23

what is risk managment?

Answer 23

the identification, analysis and economic control of risks which threaten the assets or earning capacity of a business. there may be legal requirement to manageong risk.

Question 24

what are the 4 steps in the risk management process

Answer 24

awareness and identification
analysis: assessment and measurement
response and control
monitoring and reporting

Question 25

what are the 4 repsoneses in risk management

Answer 25

Avoidance
Reduction
Sharing
Acceptance

Question 26

what controls can be put in place to mintage risk?

Answer 26

physical controls
financial
system
management

Question 27

what is a crisis

Answer 27

an unexpected event threatens the wellbeing of a business or s significant disruption to the business and its normal operations which impacts on its customers employees, investors ad other stakeholders.

they can be predictable adn quantifiable or completely unexpected.

Question 28

what is crisis managment?

Answer 28

idnetifying a crisis, planning a response to the crisis and confronting adn resolving the crisis

Question 29

What tyoes of effects can crisises ahve?

Answer 29

financial
Public relations
Strategic crisis