1. What is the primary goal of risk management in business?
a) Eliminate all risks
b) Minimize the impact of risks
c) Ignore potential risks
d) Maximize profits regardless of risks
Answer: b) Minimize the impact of risks
2. What is the term for the process of identifying and assessing potential risks that could affect an organization’s objectives?
a) Risk mitigation
b) Risk avoidance
c) Risk analysis
d) Risk identification
Answer: d) Risk identification
3. Which type of risk is associated with unexpected events that may have a positive or negative impact on a project or business?
a) Strategic risk
b) Operational risk
c) Business risk
d) Uncertainty risk
Answer: d) Uncertainty risk
4. In risk management, what does the acronym SWOT stand for?
a) Strengths, Weaknesses, Opportunities, Threats
b) Systematic Work Output Tool
c) Strategic Workflow Optimization Technique
d) Structured Workplace Observation Training
Answer: a) Strengths, Weaknesses, Opportunities, Threats
5. What is the purpose of a risk register in the context of risk management?
a) Tracking daily operational tasks
b) Identifying potential risks and their characteristics
c) Managing employee performance
d) Budget allocation for risk mitigation
Answer: b) Identifying potential risks and their characteristics
6. Which risk response strategy involves accepting the consequences of a particular risk without taking specific actions to alter its likelihood or impact?
a) Risk avoidance
b) Risk mitigation
c) Risk acceptance
d) Risk transfer
Answer: c) Risk acceptance
7. What does the term “mitigation” mean in the context of risk management?
a) Transferring risk to another party
b) Reducing the likelihood or impact of a risk
c) Accepting all identified risks
d) Ignoring potential risks
Answer: b) Reducing the likelihood or impact of a risk
8. Which type of risk is associated with changes in market conditions, technology, or regulations?
a) Operational risk
b) Financial risk
c) External risk
d) Strategic risk
Answer: c) External risk
9. What risk assessment method involves assigning a qualitative rating to the probability and impact of identified risks?
a) Monte Carlo simulation
b) Delphi technique
c) SWOT analysis
d) Risk matrix
Answer: d) Risk matrix
10. In the context of project management, what is the term for risks that remain after risk responses have been implemented?
a) Residual risks
b) Inherent risks
c) Contingent risks
d) Strategic risks
Answer: a) Residual risks
11. What is the primary purpose of a contingency plan in risk management?
a) Eliminate all identified risks
b) Provide an alternative course of action in case of unexpected events
c) Transfer all risks to external parties
d) Ignore potential risks
Answer: b) Provide an alternative course of action in case of unexpected events
12. Which risk management technique involves transferring the financial consequences of a risk to another party, such as through insurance?
a) Risk avoidance
b) Risk mitigation
c) Risk acceptance
d) Risk transfer
Answer: d) Risk transfer
13. What is the term for the maximum loss an organization is willing to bear from a particular risk?
a) Risk appetite
b) Risk threshold
c) Risk limit
d) Risk tolerance
Answer: a) Risk appetite
14. What does the term “black swan event” refer to in risk management?
a) Predictable and expected risks
b) Unprecedented and unexpected events with significant consequences
c) Risks that are easily mitigated
d) Low-impact risks
Answer: b) Unprecedented and unexpected events with significant consequences
15. What risk management technique involves diversifying investments or business operations to reduce exposure to a single risk source?
a) Risk avoidance
b) Risk transfer
c) Risk pooling
d) Risk diversification
Answer: d) Risk diversification
16. In risk management, what is the purpose of a risk heat map?
a) Identifying risks only
b) Quantifying financial impacts of risks
c) Visualizing the likelihood and impact of risks
d) Assigning responsibility for risk management
Answer: c) Visualizing the likelihood and impact of risks
17. What risk management approach involves responding to risks as they arise, without predefined plans?
a) Reactive risk management
b) Proactive risk management
c) Predictive risk management
d) Adaptive risk management
Answer: a) Reactive risk management
18. What does the term “risk communication” refer to in the context of risk management?
a) Sharing risks without any analysis
b) Informing stakeholders about identified risks, their likelihood, and potential impact
c) Ignoring potential risks
d) Transferring risks to external parties
Answer: b) Informing stakeholders about identified risks, their likelihood, and potential impact
19. Which risk management tool involves estimating the potential financial impact of identified risks?
a) Delphi technique
b) Monte Carlo simulation
c) Risk matrix
d) SWOT analysis
Answer: b) Monte Carlo simulation
20. What is the primary purpose of a risk assessment matrix?
a) Assigning responsibility for risk management
b) Prioritizing risks based on their likelihood and impact
c) Ignoring potential risks
d) Eliminating all identified risks
Answer: b) Prioritizing risks based on their likelihood and impact