Reference no: EM132159105
1. SoCal Movie Company produces movies at a studio in Southern California. The risk manager decided to identify the range of potential consequences associated with various risks that the company faces. For example, if a severe earthquake occurred while the company was filming a movie, there could be deaths and injuries, destruction of movie sets, delays in production, costs associated with filming at an alternative location, and loss of reputation and good will. The type of analysis performed by the risk manager is called...
A. HAZOP analysis.
B. SWOT analysis.
C. Sensitivity analysis.
D. Scenario analysis.
2. Which one of the following statements is true regarding the use of risk registers with scenario models?
A. The likelihood of a risk register's scenario should not vary significantly among locations of the organization.
B. An interactive computer system should be used for risk registers so they can be updated once a year.
C. A risk register should record the likelihood of a scenario along with the consequences of associated risks.
D. The risk manager should complete a risk register for each location of the organization.
3. A risk management professional should ensure that an organizational risk register has which one of the following characteristics?
A. Prioritizes risk based on historical losses.
B. Provides interactive use for risk owners.
C. Compiles documents from multiple projects.
D. Includes only the most severe risks.
4. Northeast Urban Properties owns and operates office buildings in New York, Boston, and Philadelphia. The risk manager decided to examine the impact of potential terrorist attacks on each building. For example, for the Philadelphia building, the risk manager examined attacks at three levels: scare (e.g. suspicious package), minor explosion or gas attack, and large-scale attack.
For each level, the risk manager listed the risk owners, the risk quadrants impacted, the likelihood of attack, the consequence, the risk level, and the risk control measures that needed to be implemented. This information was summarized in a one-page chart. The chart the risk manager prepared is a...
A. Risk map with simulation.
B. Risk register with scenario model.
C. Risk matrix with value at risk.
D. Risk report with warning color code.
5. Risk management professionals can use risk mapping to identify inherent risk and residual (current) level of risk. Inherent risk is important because the difference between inherent and residual risk provides a measure of...
A. Speculative risk.
B. Volatility.
C. The effectiveness of the current risk treatment.
D. The necessity of risk financing.
6. Steve is the chief legal counsel at Chemical Company. Gene, the company's risk manager, asked Steve to determine if the company is meeting all of its obligations—pollution standards, worker safety rules, employee benefit requirements, and other standards. This study of adherence to statutes and regulations is called...
A. An internal control review.
B. An underwriting audit.
C. A contract analysis.
D. A compliance review.