Day 20

Question 1

Dividend distributions represent:

Answer 1

Value Realization

MCQ-06256

Question 2

What assessment techniques can be used to assess risk?

Answer 2

1. Benchmarking
2. Objective statistical data with estimable probabilities
3. Subjective assumptions which take into account impact without probabilities

MCQ-00645

Question 3

According to the COSO Enterprise Risk Management-Integrated Framework, uncertainty in Enterprise Risk Management refers to:

Answer 3

The state of not knowing how or if potential event may occur

MCQ-12465

Question 4

True or False: ERM framework encompasses - Decreasing Inherent risk appetite

Answer 4

False

Inherent risk is the risk that exists when the company takes no action. ERM manages risk so that it aligns with the risk appetite

MCQ-09005

Question 5

In ERM, when does Event Identification take place?

Answer 5

After developing objectives

MCQ-06490

Question 6

Components of ERM: Governance and Culture

Answer 6

• Desired Culture
• Oversight
• Values
• Employees
• Structure

MCQ-06257

Question 7

What ERM component is committed to attracting, developing, and retaining capable individuals?

Answer 7

Governance and Culture

MCQ-06259

Question 8

Components of ERM: Strategy and Objective setting

Answer 8

• Evaluate alternative Strategies
• Objectives
• Analyze business context
• Defines Risk appetite

MCQ-06261

Question 9

Define: Residual Risk

Answer 9

The risk that remains after MGMT has taken actions to mitigate negative events

MCQ-06149

Question 10

Risk appetite has generally been exceeded when:

Answer 10

The likelihood and impact of negative events significantly exceed Residual Risks.

MCQ-06149

Question 11

A company’s performance guidelines sets a lower limit of 3% unfavorable material usage variance for its production facility. What ERM principal aligns with this performance guideline?

Answer 11

Formulating business Objectives

MCQ-15782

Question 12

According to COSO ERM, MGMT considers the following risks:

Answer 12

1. Inherent risk
2. Actual Residual Risk
3. Target Residual Risk

Note: Unknown risk is not a specific consideration

MCQ-12447

Question 13

How is statistical risk ranking methodology used?

Answer 13

The assessment of the severity of risk is contained within the Performance component

Assessing risk severity includes the likelihood of the risk occurring and the impact if it does occur

MCQ-14802