RISK MANAGEMENT EXAMINATION QUESTIONS AND
CORRECT ANSWER WITH EXPLANATION GRADED A+
STUDY GUIDE SOUTHERN NEW HAMPSHIRE UNIVERSITY
1. Risk management is the process of:
A. Identifying, assessing, and controlling risks
B. Ignoring hazards
C. Eliminating all business activities
D. Reducing communication
Answer: A
Rationale: Risk management minimizes threats and improves organizational safety.
2. The primary goal of risk management is to:
A. Reduce the likelihood and impact of losses
B. Increase uncertainty
C. Ignore hazards
D. Eliminate planning
Answer: A
Rationale: Effective risk management protects organizations from harm.
3. A risk is best defined as:
A. The possibility of loss or harm
B. A guaranteed profit
C. A completed project
D. A communication tool
Answer: A
Rationale: Risks involve uncertainty that may negatively affect objectives.
4. Risk identification involves:
,A. Recognizing potential threats and hazards
B. Ignoring warning signs
C. Eliminating documentation
D. Delaying decisions
Answer: A
Rationale: Identifying risks is the first step in risk management.
5. Risk assessment determines:
A. The likelihood and impact of risks
B. Employee salaries only
C. Building dimensions only
D. Cafeteria profits only
Answer: A
Rationale: Assessment helps prioritize risks.
6. A risk register is used to:
A. Document identified risks and responses
B. Record cafeteria menus
C. Track parking spaces
D. Design buildings
Answer: A
Rationale: Risk registers organize and monitor risks.
7. Risk mitigation refers to:
A. Actions taken to reduce risk impact or likelihood
B. Increasing exposure to hazards
C. Ignoring safety procedures
D. Eliminating communication
Answer: A
Rationale: Mitigation lowers risk severity.
8. Residual risk is:
, A. The remaining risk after controls are applied
B. A risk that never existed
C. A guaranteed profit
D. A completed task
Answer: A
Rationale: Some risk remains even after mitigation.
9. Risk avoidance means:
A. Eliminating activities that create risk
B. Increasing exposure intentionally
C. Ignoring hazards
D. Delaying responses
Answer: A
Rationale: Avoidance removes the source of risk.
10. Risk transfer involves:
A. Shifting risk responsibility to another party
B. Ignoring risks completely
C. Eliminating documentation
D. Increasing liability
Answer: A
Rationale: Insurance is a common example of risk transfer.
11. Insurance is primarily used for:
A. Risk transfer
B. Risk elimination
C. Risk creation
D. Ignoring hazards
Answer: A
Rationale: Insurance transfers financial responsibility.
12. Operational risks arise from:
CORRECT ANSWER WITH EXPLANATION GRADED A+
STUDY GUIDE SOUTHERN NEW HAMPSHIRE UNIVERSITY
1. Risk management is the process of:
A. Identifying, assessing, and controlling risks
B. Ignoring hazards
C. Eliminating all business activities
D. Reducing communication
Answer: A
Rationale: Risk management minimizes threats and improves organizational safety.
2. The primary goal of risk management is to:
A. Reduce the likelihood and impact of losses
B. Increase uncertainty
C. Ignore hazards
D. Eliminate planning
Answer: A
Rationale: Effective risk management protects organizations from harm.
3. A risk is best defined as:
A. The possibility of loss or harm
B. A guaranteed profit
C. A completed project
D. A communication tool
Answer: A
Rationale: Risks involve uncertainty that may negatively affect objectives.
4. Risk identification involves:
,A. Recognizing potential threats and hazards
B. Ignoring warning signs
C. Eliminating documentation
D. Delaying decisions
Answer: A
Rationale: Identifying risks is the first step in risk management.
5. Risk assessment determines:
A. The likelihood and impact of risks
B. Employee salaries only
C. Building dimensions only
D. Cafeteria profits only
Answer: A
Rationale: Assessment helps prioritize risks.
6. A risk register is used to:
A. Document identified risks and responses
B. Record cafeteria menus
C. Track parking spaces
D. Design buildings
Answer: A
Rationale: Risk registers organize and monitor risks.
7. Risk mitigation refers to:
A. Actions taken to reduce risk impact or likelihood
B. Increasing exposure to hazards
C. Ignoring safety procedures
D. Eliminating communication
Answer: A
Rationale: Mitigation lowers risk severity.
8. Residual risk is:
, A. The remaining risk after controls are applied
B. A risk that never existed
C. A guaranteed profit
D. A completed task
Answer: A
Rationale: Some risk remains even after mitigation.
9. Risk avoidance means:
A. Eliminating activities that create risk
B. Increasing exposure intentionally
C. Ignoring hazards
D. Delaying responses
Answer: A
Rationale: Avoidance removes the source of risk.
10. Risk transfer involves:
A. Shifting risk responsibility to another party
B. Ignoring risks completely
C. Eliminating documentation
D. Increasing liability
Answer: A
Rationale: Insurance is a common example of risk transfer.
11. Insurance is primarily used for:
A. Risk transfer
B. Risk elimination
C. Risk creation
D. Ignoring hazards
Answer: A
Rationale: Insurance transfers financial responsibility.
12. Operational risks arise from:
