24 Questions
What is the primary focus of risk management?
To deal with the effect of uncertainty
What is the first step in the risk management process?
Risk assessment
What are the two main components of risk management?
Risk assessment and risk treatment
What is the goal of risk management?
To deal with the effect of uncertainty
What is the name of the figure that illustrates the risk management process?
Figure (5-1): Risk Management
What type of risk is often associated with an organization's business strategy?
Speculative risk
What is the primary purpose of a risk management plan?
To address each risk in a specific way
How many focuses are typically outlined in a risk management plan for each risk?
4
What is the relationship between risk management and business strategy?
Risk management is a component of business strategy
What form will uncertainty ordinarily take?
Negative impacts
What might also be identified and pursued aside from negative impacts?
Positive impacts
What form does uncertainty NOT ordinarily take?
Positive impacts
What is the usual form that uncertainty takes?
Negative impacts
Which impacts might also be identified and pursued despite not being the ordinary form of uncertainty?
Positive impacts
Which type of risks are most risk assessments more interested in?
Non-speculative risks
What is the main characteristic of non-speculative risks?
They can result in only a loss
Why might risk assessments consider speculative risks?
Because they can mitigate the negatives
How do speculative risks differ from non-speculative risks?
Speculative risks can result in either a profit or loss
What is the primary concern of risk assessments?
The losses from non-speculative risks
Which action involves deciding not to pursue practices that give rise to risk?
Avoid the risk
What does it mean to retain the risk?
Keeping the risk under review
When should a risk be kept under review?
When the risk is retained
Which action is not associated with risk management as described?
Transferring the risk
How should a risk be managed if it is kept?
By consistently reviewing it
Learn about speculative risk and its importance in an organization's business strategy. Understand the four focuses of risk management plans.
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