Risk Management

Question 1

ethics in risk management

Answer 1

-bribery, fraud, and data privacy
-protect their reputation and minimize any potential harm to their stakeholders

Question 2

technology in risk management

Answer 2

-identify potential risks and to monitor the effectiveness of risk management strategies
-create models

Question 3

legal considerations affecting risk management

Answer 3

-compliance
-permits and licenses
-contracts and legally binding agreements
-

Question 4

enterprise risk management

Answer 4

-used by organizations to identify, assess, and manage risks that could potentially affect their operations

Question 5

financial risk factors associated with business contracts

Answer 5

-analyzing the terms and conditions of the contract to identify potential financial risks that could impact the organization’s financial position
-ratio requirements: maintain certain financial ratios, such as debt-to-equity or current ratio
-restricted transactions: ability to use its resources in certain ways
-financial report filing requirements: provide regular financial reports to investors or regulators

Question 6

monitor for breach of contract of non-performance related terms and conditions

Answer 6

-late payments, missed deadlines, or other violations of the contract

Question 7

alternative revenue arrangements

Answer 7

-cost plus pricing: setting a price for a product or service that is based on the cost
-contingent fees: charging a fee for a service that is based on the outcome of the service

Question 8

monitoring programs for contract-specific revenue arrangements

Answer 8

-creating a system to track and analyze the revenue generated from each contract

Question 9

monitoring programs for restrictive contract requirements

Answer 9

-ensure that all parties involved in a contract are adhering to the terms of the agreement

Question 10

types of financial risks

Answer 10

-interest rate risk
-equity risk
-commodity risk
-currency risk
-liquidity risk
-credit risk