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web.groovymark@gmail.com
- December 14, 2024
Question 21
A manufacturing company is experiencing increased costs due to supply chain disruptions. How should the company address this issue?
a) Expand its production lines
b) Implement a feedback loop between risk owners and business managers
c) Reduce employee salaries
d) Stop sourcing from global markets
Correct Answer: b) Implement a feedback loop between risk owners and business managers
Explanation: A feedback loop allows for continuous evaluation of risk response strategies and helps improve the efficiency of managing supply chain disruptions.
Question 22
A company is expanding its operations into a new country with significant political risks. What risk mitigation strategy should the company consider?
a) Risk avoidance
b) Risk sharing
c) Risk retention
d) Risk transfer
Correct Answer: b) Risk sharing
Explanation: Sharing risks through joint ventures or partnerships helps the company spread its exposure to political risks while benefiting from local knowledge and expertise.
Question 23
A company’s risk officer is facilitating a risk workshop, but participants are losing interest. What should the risk officer do to maintain engagement?
a) Encourage lengthy theoretical discussions
b) Avoid encouraging lengthy descriptions of underlying theories
c) Increase the number of participants
d) Use more complex terms to spark interest
Correct Answer: b) Avoid encouraging lengthy descriptions of underlying theories
Explanation: Keeping the discussion focused and avoiding long theoretical explanations ensures participants remain engaged and the workshop stays productive.
Question 24
A company is expanding into a market where supply chain disruptions are common. What should the risk management team assess when conducting a risk evaluation?
a) Employee satisfaction
b) Risk acceptance criteria
c) Market share
d) Production costs
Correct Answer: b) Risk acceptance criteria
Explanation: Risk acceptance criteria help the company determine how much risk it is willing to accept regarding supply chain disruptions and what actions are necessary to mitigate these risks.
Question 25
A company is launching a new product, but market research shows declining consumer confidence due to rising unemployment. What type of risk does this scenario exemplify?
a) Market risk
b) Operational risk
c) Sovereign risk
d) Economic risk
Correct Answer: d) Economic risk
Explanation: Economic risk arises from external factors such as unemployment rates, which can negatively affect consumer confidence and, subsequently, product sales.
Question 26
A CFO has been tasked with reassessing the company’s debt risk due to recent changes in central bank monetary policy. What should the CFO account for when increasing the company’s risk tolerance?
a) Decreased market share
b) Potential interest rate increases
c) Declining customer satisfaction
d) Reduced marketing expenses
Correct Answer: b) Potential interest rate increases
Explanation: The CFO should consider the risk of rising interest rates, which could increase the cost of borrowing if the company takes on additional debt.
Question 27
A company has experienced multiple project delays and is using a project management dashboard to monitor progress. What should the company do to ensure timely project launches?
a) Increase the budget for each project
b) Develop targeted action plans for delayed projects
c) Hire more project managers
d) Cease work on delayed projects
Correct Answer: b) Develop targeted action plans for delayed projects
Explanation: Targeted action plans allow the company to address the specific causes of project delays and take corrective measures to ensure on-time delivery.
Question 28
A retail company is managing risks associated with offering credit to customers. What approach should it take to optimize financial performance while managing this risk?
a) Cease offering credit
b) Accept some level of bad debts to maximize sales growth
c) Raise interest rates
d) Reduce the number of credit accounts
Correct Answer: b) Accept some level of bad debts to maximize sales growth
Explanation: Accepting a certain level of bad debts helps the company balance sales growth with risk, ensuring that credit offerings remain financially beneficial.
Question 29
A company is assessing risks related to geopolitical instability in a foreign market. Which risk management strategy should the company adopt?
a) Risk avoidance
b) Risk transfer
c) Risk sharing
d) Risk retention
Correct Answer: c) Risk sharing
Explanation: Sharing risks with a local partner through a joint venture allows the company to mitigate the impact of geopolitical risks while still pursuing market opportunities.
Question 30
A company is developing an AI platform and wants to assess risks related to technological changes. What risk management approach should the company take?
a) Implement dynamic risk assessment
b) Ignore market changes
c) Hire more employees
d) Increase marketing efforts
Correct Answer: a) Implement dynamic risk assessment
Explanation: A dynamic risk assessment framework allows the company to continuously evaluate technological risks and adapt its strategy to stay competitive in the evolving AI industry.
Question 31
A company is considering entering a new market with high growth potential but significant operational risks. What should the company do to manage these risks?
a) Enter the market without further assessment
b) Share the risk through a joint venture
c) Increase its marketing budget
d) Focus only on financial risks
Correct Answer: b) Share the risk through a joint venture
Explanation: Forming a joint venture helps the company manage the operational risks of entering a new market by sharing responsibilities and benefits with a local partner.
Question 32
A company is launching a new product, and management is conducting a risk assessment. What additional information should the risk management team consider when assessing the product launch risk?
a) Incremental information
b) Existing marketing materials
c) Employee satisfaction levels
d) Supply chain structure
Correct Answer: a) Incremental information
Explanation: Incremental information is necessary when assessing new product launch risks, as it provides a deeper understanding of potential market dynamics and risks.
Question 33
A company’s chief financial officer (CFO) is evaluating the impact of different risks on the company’s supply chain. What cost should the CFO prioritize in this evaluation?
a) Employee benefits
b) Opportunity costs of missed sales
c) Advertising costs
d) Expansion costs
Correct Answer: b) Opportunity costs of missed sales
Explanation: Opportunity costs of missed sales due to supply chain disruptions represent a significant risk to the company's profitability and should be a focus of the CFO's evaluation.
Question 34
A multinational company is entering a market with high political instability. What should the company do to manage the risk of supply chain disruptions and regulatory changes?
a) Risk avoidance
b) Risk sharing
c) Risk retention
d) Risk transference
Correct Answer: b) Risk sharing
Explanation: Risk sharing, such as forming local partnerships, allows the company to distribute the risks associated with political instability while benefiting from local expertise.
Question 35
A company has seen steady declines in sales over the past year. What risk management strategy should the company adopt to mitigate the risk of further sales losses?
a) Cease operations
b) Increase marketing
c) Implement preventive measures to address risk drivers
d) Hire more employees
Correct Answer: c) Implement preventive measures to address risk drivers
Explanation: Addressing risk drivers such as market trends or product demand declines allows the company to mitigate the risk of further sales losses and improve performance.
Question 36
A company faces frequent product quality issues due to outdated equipment. What risk management strategy should the company adopt to mitigate these issues?
a) Risk transfer
b) Purchase equipment breakdown insurance
c) Ignore the problem
d) Replace the outdated equipment
Correct Answer: d) Replace the outdated equipment
Explanation: Replacing outdated equipment helps the company mitigate the risk of frequent breakdowns and product quality issues by addressing the root cause.
Question 37
A company is expanding its operations into a market with high geopolitical risk. Which strategy would help the company manage this risk?
a) Risk transference
b) Risk avoidance
c) Risk sharing
d) Risk retention
Correct Answer: c) Risk sharing
Explanation: Sharing risks through partnerships or joint ventures allows the company to mitigate geopolitical risks while leveraging local expertise and resources.
Question 38
A company is using scenario planning to assess the risk of a product launch in a highly competitive market. What should the company prioritize in this assessment?
a) Employee satisfaction
b) Market dynamics and competition
c) Expansion into new markets
d) Increasing salaries
Correct Answer: b) Market dynamics and competition
Explanation: Prioritizing market dynamics and competition helps the company assess the potential risks of launching a new product in a competitive environment and make informed decisions.
Question 39
A retail company is expanding its product line and conducting a risk assessment. What additional element should the company consider when expanding its risk register?
a) Risk identification
b) Employee training
c) Customer satisfaction
d) Marketing budget
Correct Answer: a) Risk identification
Explanation: Risk identification is crucial when expanding a product line, as it helps the company identify new risks associated with the expansion and include them in its risk register.
Question 40
A company has experienced several project delays, causing missed deadlines. What corrective action should the company take to mitigate future delays?
a) Hire more employees
b) Develop targeted action plans for delayed projects
c) Increase project budgets
d) Ignore the delays
Correct Answer: b) Develop targeted action plans for delayed projects
Explanation: Developing targeted action plans helps the company address the root causes of project delays and take corrective action to meet future deadlines.
