Risk Management Quiz (30 Items)
1. A company experiences a drop in sales due to rising competitor activity. What type of business risk is
involved?
A. Operational risk
B. Market risk
C. Competitor risk
D. Product risk
2. A manufacturing firm buys fire insurance to protect its assets. What risk treatment method is this?
A. Risk avoidance
B. Risk retention
C. Risk sharing
D. Risk reduction
3. A firm decides not to enter a risky international market. Which risk treatment strategy is this?
A. Risk retention
B. Risk reduction
C. Risk avoidance
D. Risk sharing
4. A bank suffers losses from falling bond prices. This is an example of:
A. Liquidity risk
B. Credit risk
C. Market risk
D. Default risk
5. A business fails to repay a loan due to cash flow issues. This reflects:
A. Credit risk
B. Liquidity risk
C. Default risk
D. Operational risk
6. A company establishes rules and responsibilities for managing risk across departments. Which ISO 31000
principle is demonstrated?
A. Structured and comprehensive
B. Integrated
C. Dynamic
D. Customized
7. A product recall due to safety defects affects a brand's reputation. What kind of risk is this?
A. Regulatory risk
B. Integrity risk
C. Product risk
D. Operational risk
8. A company detects a rise in costs due to changes in exchange rates. Which type of financial risk applies?
A. Purchasing power risk
B. Market risk
C. Currency risk
D. Credit risk
9. A retail business keeps a low-risk hazard uncovered due to cost. Which strategy is used?
A. Risk sharing
B. Risk reduction
C. Risk retention
D. Risk avoidance
10. A factory strengthens safety protocols to prevent explosions. What kind of risk is being managed?
A. Leadership risk
B. Integrity risk
C. Environmental and safety risk
D. Business risk
11. A firm uses a method to trace the relationship between a risk's cause and effect. What tool is used?
A. Risk charting
B. SWOT
C. COSO
D. Risk matrix
12. A company uses a matrix to analyze the probability and impact of risks. This method is called:
A. SWOT
B. Risk charting
C. Risk mapping
D. Risk profiling
13. A poor leadership decision leads to financial loss and poor morale. This highlights:
A. Leadership risk
B. Operational risk
C. Regulatory risk
D. Market risk
14. A firm regularly monitors changes in its environment to update controls. This reflects which risk
management stage?
A. Communication and consultation
B. Risk identification
C. Monitoring and review
D. Risk assessment
15. A small business fails to comply with new safety regulations. This results in which risk?
A. Product risk
B. Regulatory risk
C. Integrity risk
D. Environmental risk
16. An insurance company investigates false claims. This may be a case of:
A. Operational risk
B. Integrity risk
C. Leadership risk
D. Credit risk
17. A retail company experiences low demand after launching an outdated product. This reflects:
A. Business risk
B. Product risk
C. Competitor risk
D. Market risk
18. A bank holds back transactions to maintain solvency. What kind of risk is it managing?
A. Market risk
B. Liquidity risk
C. Financial risk
D. Operational risk
19. A firm implements an ERM system to align risk and value creation. Which framework supports this?
A. COSO ERM
B. ISO 14000
C. Risk mapping
D. Risk charting
20. A startup uses simulations to analyze uncertain outcomes. Which method is this?
A. SWOT
B. Monte Carlo simulation
C. Decision tree
D. COSO
21. Which of the following best defines 'risk'?
A. Certainty of profit
B. Effect of uncertainty on objectives
C. Planned action for goals
D. Elimination of negative events
22. Main purpose of risk management under ISO 31000?
A. Eliminate uncertainty
B. Avoid all risks
C. Improve performance and decision-making
D. Maximize revenues
23. What does 'risk treatment' refer to?
A. Identifying stakeholders
B. Monitoring internal controls
C. Selecting and implementing options
D. Recording losses
24. Which is NOT a principle of ISO 31000?
A. Creates value
B. Isolated from decisions
C. Structured
D. Transparent
25. What is 'business risk'?
A. Uncertainty in investments
B. Potential events affecting operations
C. Government tax risk
D. Risk of disasters
26. Define 'risk identification'.
A. Predicting losses
B. Analyzing market factors
C. Recognizing and recording risks
D. Documenting goals
27. First step in ISO 31000 risk management?
A. Risk identification
B. Establishing context
C. Risk assessment
D. Risk treatment
28. Risk from failure to meet legal requirements?
A. Strategic risk
B. Environmental risk
C. Regulatory risk
D. Integrity risk
29. What is 'integrity risk'?
A. Market instability
B. Dishonest behavior
C. Machinery failure
D. Inflation
30. What does 'monitoring and review' involve?
A. Hiring risk analysts
B. Replacing board
C. Checking framework effectiveness
D. Evaluating financials only