Introduction to Risk Management

Question 1

What are the three classifications of risk

Answer 1

Business risk
Financial risk
Operational risk

Question 2

When assessing risk, what does the coefficient of variation determine

Answer 2

How much risk you are assuming in comparison to the amount of return you can expect

Question 3

In a normal distribution, what percentage of values lie between the mean and 1 standard deviation

Answer 3

34%

Question 4

In a normal distribution, what percentage of values lie between the mean and 2 standard deviations

Answer 4

47.5%

Question 5

In a normal distribution, what percentage of values lie between the mean and 3 standard deviations

Answer 5

49.9%

Question 6

If a distribution is skewed with the long tail to the left and the peak on the right, this is called

Answer 6

Left (negatively) skewed

Question 7

What are the four stages of the risk management process

Answer 7

Awareness and identification
Assessment and measurement
Response and control
Monitoring and reporting

Question 8

What are the five types of loss

Answer 8

Property loss
Liability loss
Personnel loss
Pecuniary loss
Interruption loss

Question 9

What does TARA stand for in regards to risk responses

Answer 9

Transfer
Avoidance
Reduction
Acceptance

Question 10

How can we map risks

Answer 10

Impact vs Probability

Question 11

What are some examples of crises

Answer 11

Natural disasters
Industrial accidents
Product or service failures
Public relations disaster
Business crisis
Management crisis
Legal crisis

Question 12

What is business resilience

Answer 12

An organisation’s ability to manage and survive against planned or unplanned shocks and distruptions

Question 13

What are the two axes of business resilience

Answer 13

Axis 1: Processes and functions to protect the organisation

Axis 2: General organisational characteristics driving resilience

Question 14

What is a disaster

Answer 14

When a business’ operations or a significant part of them, break down for some reason