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web.groovymark@gmail.com
- December 9, 2024
Question 01
In risk management, which of the following is an example of risk transfer?
a) Accepting the risk
b) Purchasing insurance to cover potential losses
c) Eliminating the risk
d) Ignoring the risk
Correct Answer: b) Purchasing insurance to cover potential losses
Explanation: Risk transfer involves shifting the responsibility for risk to another party, such as purchasing insurance to cover financial losses.
Question 02
Which of the following best describes a “risk appetite”?
a) The desire to avoid all risks
b) The level of risk an organization is willing to accept to achieve its objectives
c) The amount of risk that can be completely eliminated
d) The risks that are overlooked in day-to-day operations
Correct Answer: b) The level of risk an organization is willing to accept to achieve its objectives
Explanation: Risk appetite refers to the amount of risk an organization is prepared to take in pursuit of its goals.
Question 03
What is the role of external audits in enterprise risk management?
a) To identify financial opportunities
b) To provide an independent assessment of the organization’s risk management practices
c) To develop marketing strategies
d) To increase the complexity of risk management
Correct Answer: A framework for web application security testing
Explanation: OWASP stands for Open Web Application Security Project and focuses on improving the security of software through frameworks and published vulnerabilities.
Question 04
Which of the following is a benefit of conducting a risk assessment?
a) Ignoring minor risks
b) Identifying and prioritizing potential risks
c) Eliminating all risks
d) Focusing on financial gains
Correct Answer: b) Identifying and prioritizing potential risks
Explanation: Risk assessments help organizations identify and prioritize risks, allowing them to focus on managing the most critical threats.
Question 05
What is the purpose of a risk register in risk management?
a) To list all financial transactions
b) To document identified risks and track their status
c) To avoid the need for risk management
d) To increase the number of risks
Correct Answer: b) To document identified risks and track their status
Explanation: A risk register is a tool used to document and monitor identified risks and their management actions.
Question 06
Which risk management strategy involves reducing the likelihood or impact of a risk event?
a) Risk avoidance
b) Risk mitigation
c) Risk acceptance
d) Risk transfer
Correct Answer: b) Risk mitigation
Explanation: Risk mitigation focuses on taking steps to reduce the likelihood or impact of a risk event.
Question 07
What is a key objective of risk communication in enterprise risk management?
a) To eliminate all risks
b) To inform and engage stakeholders in the risk management process
c) To increase the complexity of risk management
d) To avoid discussing risks
Correct Answer: b) To inform and engage stakeholders in the risk management process
Explanation: Effective risk communication ensures that stakeholders are informed and involved in managing risks.
Question 08
Which of the following is an example of an internal risk?
a) Changes in government regulations
b) Economic downturns
c) Inefficiencies in internal processes
d) New competitors entering the market
Correct Answer: c) Inefficiencies in internal processes
Explanation: Internal risks are those that originate within the organization, such as process inefficiencies.
Question 09
In a risk matrix, what do the terms “likelihood” and “impact” refer to?
a) The cost of mitigating a risk
b) The probability of a risk occurring and the severity of its consequences
c) The financial gain from a risk
d) The number of risks identified
Correct Answer: b) The probability of a risk occurring and the severity of its consequences
Explanation: A risk matrix evaluates risks based on their likelihood of occurring and the impact they would have.
Question 10
What is the main purpose of business continuity planning?
a) To focus on day-to-day operations
b) To ensure that critical business functions can continue during and after a disaster
c) To eliminate all risks
d) To avoid dealing with external stakeholders
Correct Answer: b) To ensure that critical business functions can continue during and after a disaster
Explanation: Business continuity planning aims to ensure that essential operations can continue in the event of a disruption.
Question 11
Which of the following is an example of a strategic risk?
a) A legal dispute with a supplier
b) A competitor’s new product launch
c) A natural disaster affecting facilities
d) An unexpected change in market demand
Correct Answer: d) An unexpected change in market demand
Explanation: Strategic risks are related to decisions that impact an organization’s ability to achieve its long-term goals, such as changes in market demand.
Question 12
What is the purpose of a heat map in risk management?
a) To show financial performance
b) To visually represent the likelihood and impact of different risks
c) To eliminate risks
d) To track regulatory changes
Correct Answer: b) To visually represent the likelihood and impact of different risks
Explanation: A heat map provides a visual representation of risks, helping organizations prioritize which risks need immediate attention.
Question 13
In risk management, what is the “likelihood” of a risk?
a) The amount of financial loss caused by a risk
b) The probability that a risk will occur
c) The number of people affected by a risk
d) The effectiveness of risk controls
Correct Answer: b) The probability that a risk will occur
Explanation: Likelihood refers to how probable it is that a specific risk event will happen.
Question 14
How does a scenario analysis help in risk management?
a) By reducing the cost of risk management
b) By predicting possible outcomes and preparing for different risk scenarios
c) By eliminating all risks
d) By focusing only on internal risks
Correct Answer: b) By predicting possible outcomes and preparing for different risk scenarios
Explanation: Scenario analysis helps organizations prepare for different potential risk events by analyzing possible outcomes.
Question 15
What is a key feature of risk-informed decision-making?
a) Decisions are based solely on financial performance
b) Decisions are made without considering risks
c) Risks are considered when making strategic decisions
d) Risks are ignored in decision-making
Correct Answer: c) Risks are considered when making strategic decisions
Explanation: Risk-informed decision-making involves incorporating risk assessments into the decision-making process to better manage potential threats.
Question 16
Which of the following is a key benefit of enterprise risk management (ERM)?
a) Eliminating all risks
b) Helping organizations take a proactive approach to managing risks
c) Avoiding the need for audits
d) Ignoring low-level risks
Correct Answer: b) Helping organizations take a proactive approach to managing risks
Explanation: ERM provides a structured and proactive approach to managing risks, ensuring they are addressed before they become critical issues.
Question 17
What is an example of a technological risk in risk management?
a) A security breach due to outdated software
b) A competitor launching a new product
c) A change in government policy
d) A natural disaster
Correct Answer: a) A security breach due to outdated software
Explanation: Technological risks involve risks related to the use of technology, such as data breaches or system failures.
Question 18
Why is it important to conduct regular risk reviews?
a) To eliminate all risks
b) To ensure that risks are continuously monitored and managed
c) To avoid the need for audits
d) To reduce the number of risks identified
Correct Answer: b) To ensure that risks are continuously monitored and managed
Explanation: Regular risk reviews help organizations track and manage risks over time, ensuring that mitigation efforts remain effective.
Question 19
What is the primary goal of risk reporting?
a) To focus solely on financial performance
b) To communicate risk information to relevant stakeholders for decision-making
c) To avoid documenting risks
d) To increase the number of risks identified
Correct Answer: b) To communicate risk information to relevant stakeholders for decision-making
Explanation: Risk reporting ensures that key stakeholders are informed about risks and can make decisions based on this information.
Question 20
In the context of risk management, what is a “trigger event”?
a) An event that increases financial performance
b) An event that leads to the implementation of a risk management action
c) An event that eliminates all risks
d) An event that decreases the number of risks
Correct Answer: b) An event that leads to the implementation of a risk management action
Explanation: A trigger event is a specific occurrence that causes an organization to implement its risk management plans or controls.
