Knowledge Check

Question 1

The principal risks section of an annual report and accounts of a company is primarily used to inform who?

Answer 1

Investors

Question 2

The dimensions of physical hazard are always what?

Answer 2

Measurable

Question 3

When a person becomes familiar with a risk they are expoed to over time they will usually?

Answer 3

Underestimate the real risk

Question 4

The probability of loss that is inherent in an organisations operations & environment is a description of what type off risk?

Answer 4

Business risk

Question 5

Which term is used to describe the sbort-term actions that together will achieve a log-term objective?

Answer 5

Tactics

Question 6

A company must comply with the rules and regulations that exist in any territories where it operates. The potential legal risks are highest where?

Answer 6

Europe

Question 7

For a global business an example of a concentration risk is?

Answer 7

A many provider of an outsourced provider going into liquidation

Question 8

Whey considering the risk management process the risk analysis step involves what?

Answer 8

Identifying how often risks to a business could cause damage

Question 9

What aspect of managing risk did enterprise risk management introduce?

Answer 9

The ability to identify potential opportunities

Question 10

The risk assessment process involves three steps: identification, analysis and what?

Answer 10

Evaluation

Question 11

Which risk identification technique involves open discussion and debate between subject matter experts of the risky involved in the particular area of risk under review?

Answer 11

Brainstorming

Question 12

A company has employed a security company to design a camera system to monitor its warehouses. What term is used to describe this type of risk management information system?

Answer 12

Bespoke

Question 13

Which risk identification technique asks what if questions to find ang vulnerability in a process?

Answer 13

Business process analysis

Question 14

What is the starting point for constructing a fault tree?

Answer 14

As undesired event

Question 15

The four risk segments that make up a FIRM scorecard are:

Answer 15

Financial
Infrastructure
Reputational
Marketplace

Question 16

The FIRM scorecard emphasises that some risks are externally driven whilst others are internally driven. Those risks that are internally driven include:

Answer 16

Historical Liabilities

Question 17

Risk evaluation differs from analysis in that evaluation

Answer 17

Takes the results of analysis and apply them to the context in which the business operates

Question 18

What is the main benefit of analysing risk using frequency risk bands?

Answer 18

It is easy to see the importance of one risk against others

Question 19

How is the impact of risk usually recorded in a risk register if it cannot be measured in financial terms

Answer 19

By attaching a risk code

Question 20

How would an influenza pandemic be categorised on a risk matrix?

Answer 20

High impact and high likelihood

Question 21

What is the final stage of the risk assessment process?

Answer 21

Risk evaluation

Question 22

An insurer regularly and thoroughly reviews its risk appetite. From a risk perspective this is most likely to make Senior management

Answer 22

Risk seeking

Question 23

Which type of control barrier would be most effective to ensure the safety of a mother and baby on a maternity ward?

Answer 23

Physical barrier

Question 24

Corrective controls

Answer 24

Help an organisation to recover from loss or damage that has taken place

Question 25

Securitisation of risk involves transferring financial risky to

Answer 25

A professional risk carrier

Question 26

Why do investors put their money into securitisation products?

Answer 26

To spread the risk of their portfolios

Question 27

An agreement between two parties designed to release one party from legal claims is called a

Answer 27

Hold harmless agreement

Question 28

Involuntary risk retention may occur when an

Answer 28

Organisation wishes to take an opportunity risk

Question 29

An example of dread risk is

Answer 29

A skyscraper fire

Question 30

The term used to describe the appetite, attitude and understanding of risk that is shared by a group of people is risk:

Answer 30

Culture

Question 31

The forced closure of equitable life to new business is an example of:

Answer 31

A man-made disaster

Question 32

A government has failed to adequately invest in upgrading its transportation system over many years. This is an example of:

Answer 32

Economic risk

Question 33

Strategic risk is usually associated with an organisations:

Answer 33

Long term objectives

Question 34

A manufacturer is considering exporting its washing machines to a new market in a country subject to trade quotas. What type of risk will it be exposed to as a result of the quotas?

Answer 34

Compliance

Question 35

What is the second step of the risk assessment process?

Answer 35

Risk analysis

Question 36

Which type of risk identification is best suited to identifying obscure risks that lie hidden?

Answer 36

Organisation charts

Question 37

Regulatory enforcement is a category of which of the four main segments of the firm scorecard?

Answer 37

Reputational risk

Question 38

A company has identified a potential cash flow risk from having to pay supplies before being paid by customers. How would this be categorised on the firm scorecard?

Answer 38

An internally driven financial risk

Question 39

Which of the four risk control classes is described as “after the event measures to identify when an incident has happened”?

Answer 39

Detective

Question 40

Detective controls are designed to:

Answer 40

Identify unwanted occurrences that have already happened

Question 41

Risk controls are usually designed to ensure that residual losses are within an organisations risk:

Answer 41

Appetite

Question 42

Effective insurance is available to cover:

Answer 42

Computer breakdown

Question 43

Contracts that enable someone to buy or sell a specified asset at a specified date in the future at a specified price are called:

Answer 43

Financial derivatives

Question 44

A contract between three parties where one party accepts the risk that the principal to a contract does not perform or complete is called a:

Answer 44

Surety agreement

Question 45

How is the risk of shoplifting most likely to be managed by an organisation

Answer 45

Through voluntary risk retention

Question 46

Who is ultimately responsible for risk assessment and management in an organisation?

Answer 46

The board of directors collectively

Question 47

A hazard is best described as

Answer 47

Anything that causes harm

Question 48

What does the compliance department within an organisation do?

Answer 48

Compare an organisation's processes against external rules.

Question 49

What is the main benefit of analysing risks using frequency risk bands?

Answer 49

It is easy to see the importance of one risk against others.

Question 50

A company has arranged life cover on its sales director, who is key to generating new business for the company. What type of risk control has it used?

Answer 50

Corrective

Question 51

What is the main reason for large organisations using securitisation instruments?

Answer 51

Traditional insurance cover is not available or too costly.

Question 52

A requirement to wear protective clothing whilst performing dangerous duties is an example of a:

Answer 52

Directive Control

Question 53

Preventive risk control measures include:

Answer 53

Separation of duties

Question 54

Preventive risk control measures include:

Answer 54

Separation of duties

Question 55

Risk controls are usually designed to ensure that residual losses are within an organisation's risk:

Answer 55

Appetite