RMI 2302 EXAM 2 QUESTIONS AND ANSWERS
The text discusses the TTR approach to managing supply chain risks. The benefits of
the suggested approach are:
I. Identifies hidden exposures
II. Reveals supply chain dependencies and bottlenecks
III. Predicts rare events - Answers - I. and II.
Which of the following are TRUE with regard to regulating derivatives?
I. Most proposals related to regulation of derivatives suggest the need for increased
transparency.
II. Internal regulation has been successful in limiting derivative risk.
III. Derivatives regulation is best accomplished at the national level - Answers - I. only
Undertaking activities because of curiosity is best described as what type of incentive? -
Answers - Natural
Economics is basically the study of - Answers - incentives
Why do organizations categorize risk?
I. Help identify which area of expertise is needed.
II. Help identify optimal risk management techniques to apply.
III. Help organize reports to stakeholders - Answers - I. II. and III.
Which of the following best describes the variations in profitability? - Answers - business
risk
Reputational risk often get lumped together with which of the following categories of
risk?
A.Operational risk.
B.Black Swan risk.
C.Supply chain risk.
D.Business risk.
E.None of the above. - Answers - E
(because the right answer is strategic risk)
For individuals, which of the following is a common cause of liability?
I. Outliving assets
II. Negligence
III. Death - Answers - II. only
The risks associated with data driven decision making include(s):
I. Poor design
, II. Privacy/data breaches
III. Fewer mistakes - Answers - I. and II.
Examples of "poor design" that may appear in data driven decision making includes:
I. poor data sources.
II. no verification of results.
III. no accounting for source of data - Answers - I. II. and III.
Which of the following is TRUE regarding behavioral analytics?
I. Behavioral analytics uses big data to predict future individual actions.
II. Focused on "ethical opportunities".
III. Focused on operational risk - Answers - I. II. and III.
What was the primary recommendation of the Baker report? - Answers - Process safety
Which of the following describes the efficient frontier:
I. It explains the tradeoff of the discount rate and opportunity cost.
II. It only considers the relationship between return and systemic risk.
III. It is the graphical representation of the tradeoff between risk and reward - Answers -
III. only
The Law of Unintended Consequences refers to the inability to predict: - Answers -
Responses to incentives systems
The corporate strategy of BP under Browne included: - Answers - Green company and
alternative fuels
Which of the following is an example of a derivative contract?
a. warrants
b. swaps
c. forward contracts
d. all of the above are derivative contracts
e. none of the above are derivative contracts - Answers - all of the above
Premature death is defined as: - Answers - none of the above
death with financial responsibilities still remaining
Which of the following is an overriding theme of the BP case?
I. Process Management
II. Cost Cutting
III. Regulation - Answers - I. and III.
Strategy should make companies:
I. More competitive.
II. More alert to circumstances.
III. More resilient - Answers - I. II. and III.
The text discusses the TTR approach to managing supply chain risks. The benefits of
the suggested approach are:
I. Identifies hidden exposures
II. Reveals supply chain dependencies and bottlenecks
III. Predicts rare events - Answers - I. and II.
Which of the following are TRUE with regard to regulating derivatives?
I. Most proposals related to regulation of derivatives suggest the need for increased
transparency.
II. Internal regulation has been successful in limiting derivative risk.
III. Derivatives regulation is best accomplished at the national level - Answers - I. only
Undertaking activities because of curiosity is best described as what type of incentive? -
Answers - Natural
Economics is basically the study of - Answers - incentives
Why do organizations categorize risk?
I. Help identify which area of expertise is needed.
II. Help identify optimal risk management techniques to apply.
III. Help organize reports to stakeholders - Answers - I. II. and III.
Which of the following best describes the variations in profitability? - Answers - business
risk
Reputational risk often get lumped together with which of the following categories of
risk?
A.Operational risk.
B.Black Swan risk.
C.Supply chain risk.
D.Business risk.
E.None of the above. - Answers - E
(because the right answer is strategic risk)
For individuals, which of the following is a common cause of liability?
I. Outliving assets
II. Negligence
III. Death - Answers - II. only
The risks associated with data driven decision making include(s):
I. Poor design
, II. Privacy/data breaches
III. Fewer mistakes - Answers - I. and II.
Examples of "poor design" that may appear in data driven decision making includes:
I. poor data sources.
II. no verification of results.
III. no accounting for source of data - Answers - I. II. and III.
Which of the following is TRUE regarding behavioral analytics?
I. Behavioral analytics uses big data to predict future individual actions.
II. Focused on "ethical opportunities".
III. Focused on operational risk - Answers - I. II. and III.
What was the primary recommendation of the Baker report? - Answers - Process safety
Which of the following describes the efficient frontier:
I. It explains the tradeoff of the discount rate and opportunity cost.
II. It only considers the relationship between return and systemic risk.
III. It is the graphical representation of the tradeoff between risk and reward - Answers -
III. only
The Law of Unintended Consequences refers to the inability to predict: - Answers -
Responses to incentives systems
The corporate strategy of BP under Browne included: - Answers - Green company and
alternative fuels
Which of the following is an example of a derivative contract?
a. warrants
b. swaps
c. forward contracts
d. all of the above are derivative contracts
e. none of the above are derivative contracts - Answers - all of the above
Premature death is defined as: - Answers - none of the above
death with financial responsibilities still remaining
Which of the following is an overriding theme of the BP case?
I. Process Management
II. Cost Cutting
III. Regulation - Answers - I. and III.
Strategy should make companies:
I. More competitive.
II. More alert to circumstances.
III. More resilient - Answers - I. II. and III.
