MCQs on Risk Management

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Risk the combination of the probability of an event and its consequences. Risk in business is the chance that future events or results may not be as
MCQs on Risk Management

MCQs on Risk Management

Risk the combination of the probability of an event and its consequences. Risk in business is the chance that future events or results may not be as expected. Here on MCQs.CLUB we have written easy to learn Multiple-Choice Questions (MCQs) that fully cover practice questions and quizzes on Risk Management Overview, Importance and Processes, meaning, types, definition with examples, risk control, strategic risk, mcqs on cfa risk management, covering what is risk management and why is it important? Risk analysis and management MCQs. These risk management quiz with answers are also helpful for business management exams, professional accountancy exams and competitive exams.

  1. Which of the following definition for ‘Risk’ is correct?
    1. Risk the combination of the probability of an event and its consequences.
    2. Risk in business is the chance that future events or results may not be as expected.
    3. Both A&B
    4. None
  1. Why incur risk?
    1. To generate higher returns a business may have to take more risks in order to be competitive.
    2. Benefits can be financial – decreased costs, or intangible – better quality information.
    3. Both A&B
    4. None
  1. Risk Management –
    1. Risk management is the process of managing both downside risks and business risks.
    2. It can be defined as the culture, structures and processes that are focused on achieving possible opportunities yet at the same time control unwanted results.
    3. Both A&B
    4. None
  1. Risk management is a corporate governance issue. The board of directors have a responsibility to safeguard the assets of the company and to protect the investment of the shareholders from loss of value.
    1. True
    2. False
  1. Elements of a risk management system are:
    1. There should be a culture of risk awareness within the company.
    2. There should be a system and processes for identifying, assessing and measuring risks.
    3. There should be an efficient system of communicating information about risk and risk management to managers and the board of directors.
    4. All of the above
  1. Exposure to risk –
    1. When a company is exposed to risk, this means that it will suffer a loss if there are unfavourable changes in conditions in the future or unfavourable events occur.
    2. Having measured an exposure to risk, a company can estimate what the possible losses might be, realistically.
    3. Both A&B
    4. None
  1. Companies control the risks that they face. Controls cannot eliminate risks completely. The remaining exposure to a risk after control measures have been taken is called ‘Residual risk’.
    1. True
    2. False
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