RISK MANAGEMENT UNIT 1 Lesson 2

Question 1

refers to the practices, policies, and procedures aimed at
minimizing or eliminating unacceptable risks. Managing risk is a process of determining risk exposure, and then initiating action to either minimize or eliminate risk.

Answer 1

Risk management

Question 2

is the way decisions are made and implemented that
minimize the adverse effects on an organization
from accidental business losses. It enables management to identify each risk, quantify its impact, and take action to prevent it from occurring and reduce the impact if it occurs.

Answer 2

Risk management process

Question 3

4 variants of Risk management process

Answer 3

1. Risk Identification
2. Risk Analysis
3. Risk Control
4. Risk Treatments

Question 4

The first stage of the risk management
process is a systematic identification of the risks the organization faces. Often this step is called risk assessment. It is is primarily
about brainstorming.

Answer 4

Risk Identification

Question 5

is a process that assists in identifying and managing potential
problems that might undermine key business initiatives or projects. It sets out and
addresses the impact of documented threats. The identified threats are rated according to the probability of occurrence.

Answer 5

Risk analysis

Question 6

is a step in the risk
management process also known as a hazard control. It measures are designed to either reduce the risks or eliminate them. Control measures are actions taken in response to a risk factor that has the
potential to cause workplace accidents or harm.

Answer 6

Risk control

Question 7

is a risk control technique that avoids any exposure to
that particular risk. It is about eliminating any risk exposure that represents a potential loss. It includes any mitigation strategies used to avoid risk exposure.

Answer 7

Exposure avoidance

Question 8

it is applied after failing the ability to control all risks identified.

Answer 8

Risk Treatments

Question 9

refers to a technique through which risk is transferred to a third party. The risk may be transferred by contract either by entering into a service contract or by requiring a waiver from
the participants.

Answer 9

Risk transfer

Question 10

refers to the level of risk the company retains via a conscious decision-making process. This technique is the organizations’
intentional decision to deal internally with a company’s opposing risk, rather than to
transfer it to insurance or any other third party.

Answer 10

Risk-retention