BFF5902 Introduction to risk management 3 – Semester 2 2024

Java Python BFF5902

Introduction to risk management – Semester 2, 2024

1. Which of the following statements does best describes the risk criteria?

A. A set of rules by which risks are systematically measured for significance.

B. An expression of the Board's risk appetite

C. Defining the level of significance to guide risk oversight and governance.

D. All of the above

2. Which of the following does NOT present a risk to an organisation?

A. Dragon King

B. Known-known

C. Known-unknown.

D. Unknown-unknown.

3. A risk matrix defines different risk levels by showing combinations of the likelihood scale and the control effectiveness rating.

A. True

B. False

4. Which of the following statements best describes a life insurance contract?

A. A speculative risk

B. A dynamic risk

C. A particular risk

D. A fundamental risk

5. The maximum amount of risk that an organisation is able to support in pursuit of its objectives is known as its risk appetite.

A. True

B. False

6. Risk tolerance is the ability of an individual to discern a certain amount of risk.

A. True

B. False

7. A rare and extreme event that is the result of a complex interaction of known systems is termed a Black Swan.

A. True

B. False

8. Which of the following statements best describes a risk after it has been treated?

A. Inherent risk

B. Residual risk

C. Acceptable risk

D. Zero risk

9. Which of BFF5902 Introduction to risk management 3 – Semester 2, 2024 the following statements is TRUE?

A. The organisation's risk appetite statement is a formal written document that states the Chief Executive Officers risk appetite.

B. A higher tolerance for risk will cause an individual to be better at perceiving the risk.

C. The risk appetite statement is a formal written document that states which risks are acceptable to an organisation.

D. Individuals in an organisation will be able to equally perceive a risk

10. The Delphi method is best described by which of the following statements?

A. A structured workshop in which a question is iteratively repeated in order to encourage consensus amongst participants.

B. An iterative survey method designed to remove anchoring bias from experts

C. A computer program that estimates the amount of cash at risk due to uncertainties in economic factors.

D. An iterative survey method designed to remove availability bias from participants

11. Which of the following risks should receive the highest priority for corrective treatment to its control?

A. Control critical risks

B. Over-controlled risks.

C. Low inherent risks with weak controls

D. High inherent risks with weak controls.

12. Which of the following statements best describes the purpose of risk management?

A. To maximise the value of the firm to all stakeholders by optimising the level of risk-taking.

B. To reduce the risk of missing key objectives by the removal of all identified risks.

C. To most cost effectively manage the cost of insurance.

D. To maximise the capital value of the firm and therefore the wealth of its shareholders