1. What is the purpose of risk mitigation strategies?
A. To increase the impact of risks
B. To eliminate all risks from an organization
C. To reduce the impact and likelihood of negative outcomes
D. To shift risks to another party
Answer: C) To reduce the impact and likelihood of negative outcomes
Rationale: Risk mitigation strategies focus on reducing both the
likelihood and the severity of potential risks through actions like
controls and procedures. (quizlet.com)
2. Which of the following is an example of a moral hazard?
A. Installing fire alarms in a building
B. A driver speeding because they have comprehensive car insurance
C. A company diversifying its investments
D. A homeowner installing a security system
Answer: B) A driver speeding because they have comprehensive car
insurance
Rationale: A moral hazard occurs when the presence of insurance
changes the behavior of the insured, such as taking on more risk
because they are covered.
Studypool
3. What is a key principle of risk avoidance?
,A. Accepting the risk and taking no action
B. Identifying risks and taking steps to eliminate or prevent them
C. Transferring the risk to another party
D. Minimizing the frequency of the risk event
Answer: B) Identifying risks and taking steps to eliminate or prevent
them
Rationale: Risk avoidance involves identifying risks and taking action
to either eliminate or prevent them from occurring. It is often
considered the most effective method of dealing with risks.
(quizlet.com)
4. What is the primary benefit of implementing a risk management
program in an organization?
A. It eliminates all risks from the organization
B. It helps to increase the likelihood of risky events occurring
C. It provides a structured approach to identifying and addressing risks
D. It helps to reduce the organization’s exposure to financial losses
Answer: C) It provides a structured approach to identifying and
addressing risks
Rationale: A risk management program helps organizations take a
systematic approach to identifying, assessing, and managing risks in a
way that reduces uncertainty and minimizes negative outcomes.
(quizlet.com)
5. What is the primary purpose of risk management?
A. To eliminate all risks
, B. To identify and manage potential losses
C. To increase the frequency of losses
D. To transfer all risks to insurance companies
Answer: B) To identify and manage potential losses
Rationale: Risk management aims to identify, assess, and prioritize
risks to minimize the impact of potential losses.
Quizlet
6. Which of the following is an example of a legal hazard?
A. A hazardous chemical spill due to improper handling
B. An employee suing the company for workplace injuries
C. A natural disaster damaging business property
D. A poorly written contract leading to a lawsuit
Answer: D) A poorly written contract leading to a lawsuit
Rationale: Legal hazards refer to the potential for legal consequences
arising from actions or inactions, such as a poorly written contract.
(quizlet.com)
7. Which of the following is an example of a physical hazard?
A. A company’s financial instability
B. A wet floor in a supermarket
C. A poorly drafted contract
D. A change in government regulations
Answer: B) A wet floor in a supermarket
A. To increase the impact of risks
B. To eliminate all risks from an organization
C. To reduce the impact and likelihood of negative outcomes
D. To shift risks to another party
Answer: C) To reduce the impact and likelihood of negative outcomes
Rationale: Risk mitigation strategies focus on reducing both the
likelihood and the severity of potential risks through actions like
controls and procedures. (quizlet.com)
2. Which of the following is an example of a moral hazard?
A. Installing fire alarms in a building
B. A driver speeding because they have comprehensive car insurance
C. A company diversifying its investments
D. A homeowner installing a security system
Answer: B) A driver speeding because they have comprehensive car
insurance
Rationale: A moral hazard occurs when the presence of insurance
changes the behavior of the insured, such as taking on more risk
because they are covered.
Studypool
3. What is a key principle of risk avoidance?
,A. Accepting the risk and taking no action
B. Identifying risks and taking steps to eliminate or prevent them
C. Transferring the risk to another party
D. Minimizing the frequency of the risk event
Answer: B) Identifying risks and taking steps to eliminate or prevent
them
Rationale: Risk avoidance involves identifying risks and taking action
to either eliminate or prevent them from occurring. It is often
considered the most effective method of dealing with risks.
(quizlet.com)
4. What is the primary benefit of implementing a risk management
program in an organization?
A. It eliminates all risks from the organization
B. It helps to increase the likelihood of risky events occurring
C. It provides a structured approach to identifying and addressing risks
D. It helps to reduce the organization’s exposure to financial losses
Answer: C) It provides a structured approach to identifying and
addressing risks
Rationale: A risk management program helps organizations take a
systematic approach to identifying, assessing, and managing risks in a
way that reduces uncertainty and minimizes negative outcomes.
(quizlet.com)
5. What is the primary purpose of risk management?
A. To eliminate all risks
, B. To identify and manage potential losses
C. To increase the frequency of losses
D. To transfer all risks to insurance companies
Answer: B) To identify and manage potential losses
Rationale: Risk management aims to identify, assess, and prioritize
risks to minimize the impact of potential losses.
Quizlet
6. Which of the following is an example of a legal hazard?
A. A hazardous chemical spill due to improper handling
B. An employee suing the company for workplace injuries
C. A natural disaster damaging business property
D. A poorly written contract leading to a lawsuit
Answer: D) A poorly written contract leading to a lawsuit
Rationale: Legal hazards refer to the potential for legal consequences
arising from actions or inactions, such as a poorly written contract.
(quizlet.com)
7. Which of the following is an example of a physical hazard?
A. A company’s financial instability
B. A wet floor in a supermarket
C. A poorly drafted contract
D. A change in government regulations
Answer: B) A wet floor in a supermarket
