The New Age of Risk Management Strategy for Business

Question 1

GoFish is a national retailer of fishing equipment. Which business condition would most likely pose a significant business risk to GoFish in the future?

A. trademark infringement

B. internet expansion

C. identity theft

D. technological advances

Answer 1

B. internet expansion
Correct

Just as Amazon put many retailers out of business, online sales are a risk to GoFish’s retail-oriented approach.

Question 2

Which physical damage loss is least likely to be fully recovered by insurance?

A. damage to property

B. normal wear and tear

C. time lost to repair or replace

D. employee theft

Question 3

GoFish’s showroom lost power for a week after a major storm. This week was during the height of the fishing season. What is the hidden cost in sales GoFish was not able to make?

A. reduced efficiency

B. increased workload

C. opportunity cost

D. time burden cost

Answer 3

C. opportunity cost
Correct

This cost is the opportunity for sales that was lost.

Question 4

GoFish has a weekly podcast in which it talks about the hottest lakes for fishing. If GoFish highlights the Cast Master rods and reels it sells, which risk must GoFish be certain it mitigates?

A. GoFish must disclose any paid advertising or sponsorship by Cast Master, in exchange for highlighting their products on the podcast.

B. GoFish must avoid showing the Cast Master rods, otherwise they are infringing on Cast Master’s trademark.

C. GoFish should avoid liability by only providing the podcast to businesses, and not to consumers.

D. GoFish must be certain it uses videos and images from the internet, rather than using its own employees.

Answer 4

A. GoFish must disclose any paid advertising or sponsorship by Cast Master, in exchange for highlighting their products on the podcast.
Correct

If GoFish is being paid by Cast Master to highlight their products, GoFish must disclose that information.

Question 5

Not all risks are obvious. For instance, which legal risk might a company face as it transitions major business operations into using artificial intelligence?

A. replacing jobs

B. backup processes

C. cyber attacks

D. employee training

Answer 5

A. replacing jobs
Correct

Labor laws, union contracts, and age discrimination are all considerations in the process of replacing jobs.

Question 6

While self-driving cars are still in the development stage, what effect will they have on insurance when companies begin using driverless cars?

A. Insurance rates will go up.

B. Insurance rates will not change.

C. Insurance rates will go down.

D. Insurance will no longer be needed.

Answer 6

A. Insurance rates will go up.
Correct

Insurance rates usually go up, at least initially, when there is uncertainty about something new.

Question 7

ABC Co.’s HR manager, Chan, has fallen victim to identity theft. What should your initial ethical concern as CEO be when you first learn about it?

A. Limit Chan’s access to intellectual property.

B. Secure Chan’s company computer.

C. Protect the company’s brand.

D. Help Chan deal with the issue.

Answer 7

D. Help Chan deal with the issue.
Correct

This is not just an ethical concern. Chan’s attention will be diverted, and he will be less able to perform his work.

Question 8

Which workers compensation risk poses the greatest uncertainty to a business?

A. carpal tunnel injuries among office workers

B. emergency healthcare in a foreign country

C. emotional strain from using technology

D. repetitive motion injuries among factory workers

Answer 8

B. emergency healthcare in a foreign country
Correct

The cost and availability of emergency healthcare in foreign countries is very uncertain and unpredictable.

Question 9

ABC Co. operates a warehouse on the Florida Coast. Which weather-related risk is most likely to occur and impact ABC’s operations because of its location?

A. wildfires

B. intellectual property theft

C. power loss

D. winter storms

Question 9

ABC Co. operates a warehouse on the Florida Coast. Which weather-related risk is most likely to occur and impact ABC’s operations because of its location?

A. wildfires

B. intellectual property theft

C. power loss

D. winter storms

Answer 9

C. power loss
Correct

This is the most likely weather-related occurrence, due to hurricanes.

Question 10

ABC Co. suffered a ransomware attack. Which type of insurance will provide the most monetary recovery for ABC to rebuild its systems?

A. cyber policy with ransomware inclusion

B. cyber liability insurance

C. business liability with ransomware inclusion

D. business property insurance

Answer 10

A. cyber policy with ransomware inclusion
Correct

This combination will provide insurance against losses incurred in a ransomware attack.

Question 11

How can Google Alerts help a company protect itself against threats to the brand?

Select an answer:
A. It will provide an alert anytime your company name or brand is mentioned on social media.
B. It will provide an alert anytime your company or brand is mentioned positively on social media.
C. It will provide an alert anytime a former employee is hired by a competitor of your company or brand.
D. It will provide an alert anytime your company or brand is mentioned negatively on social media.

Answer 11

A. It will provide an alert anytime your company name or brand is mentioned on social media.

Question 12

GoFish uses a drone to scope out new streams for fishermen. Which type of insurance does GoFish need for the drones?

Select an answer:
A. Inland Marine
B. Business Liability
C. Aviation
D. Robotics

Answer 12

A. Inland Marine

Question 13

ABC Co. is considering business life insurance for its CEO. What is likely to be the most significant expense the CEO needs to cover, other than the insurance proceeds paid to the beneficiary?

Select an answer:
A. continuing business operations
B. payment to the spouse
C. replacing the CEO
D. communication with employees and stakeholders

Answer 13

C. replacing the CEO

Question 14

Among the risk of attacks on your business, which threat is the least likely to cause a company financial harm?

Select an answer:
A. a cybercriminal operating a sophisticated hacking scheme from Russia
B. a tech-savvy hacker in the U.S. working out of his or her parents’ basement
C. the cost of technology to protect a company’s information from a cyber attack
D. the cost of training employees to protect a company’s information from a cyber attack

Answer 14

B. a tech-savvy hacker in the U.S. working out of his or her parents’ basement

Question 15

As technology evolves in the future, what is predicted to happen with business insurance?

Select an answer:
A. Insurance companies will be unlikely to insure against the new risks.
B. The new risks will find creative companies willing to insure against them.
C. Only the most likely risks will find companies willing to provide insurance against them.
D. Insurance will fade away, and companies will self-insure against the new risks.

Answer 15

B. The new risks will find creative companies willing to insure against them.

Question 16

ABC Co.’s customer database has been uncovered by a phishing scheme through employees’ social media accounts. If the schemer then uses a BOT attack, which could have the most detrimental effect on ABC?

Select an answer:
A. Their customers will receive an email, seemingly from ABC, that will contain a virus.
B. Their employees’ computers will be locked, and they will not be able to access the client database.
C. Their employees’ personal information will be collected and used by the schemer.
D. Their customers will receive an email, seemingly from ABC, containing a phony invoice.

Answer 16

A. Their customers will receive an email, seemingly from ABC, that will contain a virus.

Question 17

In mid-crisis actions, which individuals do companies frequently fail to include?

Select an answer:
A. crisis commander
B. scribe
C. technology control
D. claims processor

Answer 17

B. scribe

Question 18

Which type of cryptocurrency provides a public ledger account balance that anyone can see?

Select an answer:
A. mobile apps
B. credit cards
C. bitcoin
D. blockchain

Answer 18

D. blockchain

Question 19

How would you best define culture shock in the context of business operations?

Select an answer:
A. ecological impacts of doing business globally
B. technological innovation in global business
C. differences in employee motivation within a company
D. differences in language usage between countries

Answer 19

C. differences in employee motivation within a company

Question 20

Many companies back up and store vital information in the Cloud. How can a company protect intellectual property stored this way?

Select an answer:
A. Trademark and copyright your intellectual property.
B. Set up strong encryptions in your technology.
C. Manage your employees’ access to your technology.
D. Invest in a good intellectual property attorney.

Answer 20

B. Set up strong encryptions in your technology.

Question 21

Which type of leaders often use their position for personal prestige rather than for performing their roles to a company’s benefit?

Select an answer:
A. directors
B. line-level managers
C. experts
D. CEOs

Answer 21

A. directors

Question 22

InsureCo salespeople talk to each other using insurance industry jargon. Which adverse business effect can using “industry gibberish” have on InsureCo’s operations?

Select an answer:
A. Communication will not always be clear among other employees.
B. Older workers will make generalizations about younger workers.
C. New employees cannot be onboarded in that type of environment.
D. Jargon does not have a specific meaning within the company.

Answer 22

A. Communication will not always be clear among other employees.