Question Bank Chapter 5 Risk Flashcards
In assessing potential gross risk, you should take into account:
Potential loss and probability of occurrence
Form of event risk
Regulatory or legal risk
Credit risk is…
Economic risk due to the default of a customer
Order in which an organisation should respond to risk
Avoidance, reduction, sharing (transfer), acceptance (retention)
An organisation responds to an identified risk by restructuring. Which category of control has it used?
Management controls
What type of risk involves process risk, people risk and event risk?
Operational risk
Product risk is a form of…
Business risk
How do you work out coefficient variation?
Standard deviation divided by the mean
How do you work out standard deviation?
Square root of the variance
2 correct statements about normal distribution:
The distribution is a continuous distribution, the closer a range of values is to the mean, the higher the probability of that range of values occurring
