Risk Management
Practice 2026-VERSION
WITH QUALITY
QUESTION AND
VERIFIED ANSWERS
100% CORRECT WITH
RATIONELS.
1. What is the primary objective of risk
management?
A. Eliminate all risks
B. Maximize profits
,C. Identify and manage risks effectively
D. Avoid all business activities
Answer: C
Rationale: Risk management focuses on
identifying, assessing, and controlling
risks—not eliminating them entirely.
2. Which of the following is a strategic
risk?
A. Employee fraud
B. Market competition
C. System failure
D. Inventory theft
Answer: B
Rationale: Strategic risks arise from
,external factors affecting long-term
objectives, such as competition.
3. Operational risk refers to:
A. Financial losses from investments
B. Failures in internal processes
C. Market price fluctuations
D. Regulatory penalties
Answer: B
Rationale: Operational risk stems from
internal process failures, systems, or
human errors.
4. Which tool is commonly used to
identify risks?
, A. SWOT analysis
B. Ratio analysis
C. Break-even analysis
D. Trend analysis
Answer: A
Rationale: SWOT helps identify strengths,
weaknesses, opportunities, and threats
(risks).
5. Risk appetite refers to:
A. Maximum risk a company can
eliminate
B. Amount of risk a company is willing to
accept
Practice 2026-VERSION
WITH QUALITY
QUESTION AND
VERIFIED ANSWERS
100% CORRECT WITH
RATIONELS.
1. What is the primary objective of risk
management?
A. Eliminate all risks
B. Maximize profits
,C. Identify and manage risks effectively
D. Avoid all business activities
Answer: C
Rationale: Risk management focuses on
identifying, assessing, and controlling
risks—not eliminating them entirely.
2. Which of the following is a strategic
risk?
A. Employee fraud
B. Market competition
C. System failure
D. Inventory theft
Answer: B
Rationale: Strategic risks arise from
,external factors affecting long-term
objectives, such as competition.
3. Operational risk refers to:
A. Financial losses from investments
B. Failures in internal processes
C. Market price fluctuations
D. Regulatory penalties
Answer: B
Rationale: Operational risk stems from
internal process failures, systems, or
human errors.
4. Which tool is commonly used to
identify risks?
, A. SWOT analysis
B. Ratio analysis
C. Break-even analysis
D. Trend analysis
Answer: A
Rationale: SWOT helps identify strengths,
weaknesses, opportunities, and threats
(risks).
5. Risk appetite refers to:
A. Maximum risk a company can
eliminate
B. Amount of risk a company is willing to
accept
