Hyttinen 2017 Risk Management Concepts
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Questions and Answers

What is the definition of risk appetite according to the provided text?

  • The amount of satisfaction received from a potential payoff
  • The degree of uncertainty an entity is willing to take on in anticipation of a reward (correct)
  • The maximum acceptable deviation an entity is willing to accept on project objectives
  • Risks that have not been identified and analyzed

    • Which type of risks are those that remain after all response strategies have been implemented?

  • Secondary Risks
  • Known Risks
  • Unknown Risks
  • Residual Risks (correct)

    • What is the definition of risk tolerance as per the text?

  • Risks that have not been identified and analyzed
  • Risks that can be managed proactively
  • The degree of uncertainty an entity is willing to take on in anticipation of a reward
  • The maximum acceptable deviation an entity is willing to accept on project objectives (correct)

    • Which type of risks cannot be managed because they have not been identified and analyzed?

    <p>Unknown Risks</p> Signup and view all the answers

    What is risk utility defined as in the text?

    <p>The amount of satisfaction received from a potential payoff</p> Signup and view all the answers

    Which type of risk is characterized by changes in human behavior and social structures?

    <p>Social Environment Risk</p> Signup and view all the answers

    In risk management, what does assigning a risk target a color represent?

    <p>Tolerance level for the risk</p> Signup and view all the answers

    Which environment risk type presents both risks and opportunities?

    <p>Legal Environment Risk</p> Signup and view all the answers

    What aspect must be considered to determine the severity of identified risks in risk management?

    <p>Probability and Impact factor</p> Signup and view all the answers

    Which risk type focuses on uncertainty and the probability of its occurrence?

    <p>Cognitive Environment Risk</p> Signup and view all the answers

    What does a red color in a risk matrix represent?

    <p>High severity of the risk</p> Signup and view all the answers

    What does the AMBER/Orang category represent in terms of risk tolerance?

    <p>High tolerance to the threat occurring</p> Signup and view all the answers

    What action is required when the risk rating is at an 'Extreme' level?

    <p>Immediate action required and commitment of senior management</p> Signup and view all the answers

    What type of probability scale is used in qualitative risk assessment?

    <p>Nonnumeric probability scale</p> Signup and view all the answers

    What is the main difference between Risk & Problem according to the text?

    <p>Risks are future uncertainties, while problems are current issues</p> Signup and view all the answers

    In the Risk Management Process, what does the 'GREEN' category represent in terms of risk aversion?

    <p>Averse to the risk as it cannot be tolerated if it materializes</p> Signup and view all the answers

    What action is required when the risk rating is at a 'Low' level?

    <p>Managed by routine procedures such as quality management systems</p> Signup and view all the answers

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