BUSN340 Introduction to Risk Analysis
Final Exam Review (Qns & Ans)
2025
1. What is the primary purpose of risk analysis in business?
A. To eliminate all risks entirely
B. To identify, assess, and manage potential threats and
uncertainties
C. To increase operational costs
D. To reduce employee productivity
ANS: B. To identify, assess, and manage potential threats
and uncertainties
Rationale: Risk analysis helps businesses anticipate and
mitigate potential issues, ensuring smoother operations.
©2025
,2. Which of the following is NOT a component of risk
management?
A. Risk identification
B. Risk mitigation
C. Risk exploitation
D. Risk assessment
ANS: C. Risk exploitation
Rationale: Risk management involves identifying, assessing,
and mitigating risks, not exploiting them.
3. What is a risk matrix used for?
A. Comparing competitors’ strengths
B. Evaluating the likelihood and impact of risks
C. Managing employee schedules
D. Tracking marketing performance
ANS: B. Evaluating the likelihood and impact of risks
Rationale: A risk matrix visualizes the severity and probability
of risks to prioritize mitigation strategies.
4. What does “residual risk” refer to?
A. Risks that have been eliminated through mitigation efforts
©2025
, B. Risks that remain after mitigation strategies have been
applied
C. Risks that are irrelevant to organizational goals
D. Risks associated with historical data only
ANS: B. Risks that remain after mitigation strategies have
been applied
Rationale: Residual risks are those left after controls and
mitigation measures are implemented.
5. Which type of risk is associated with market fluctuations and
economic uncertainty?
A. Operational risk
B. Strategic risk
C. Financial risk
D. Compliance risk
ANS: C. Financial risk
Rationale: Financial risk arises due to economic and market
changes that impact an organization’s financial stability.
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Fill-in-the-Blank Questions
©2025
, 6. ________ involves identifying potential risks that could
negatively impact business operations.
ANS: Risk identification
Rationale: Risk identification is the first step in understanding
threats to business processes.
7. The ________ model estimates risk probability and impact to
determine overall risk exposure.
ANS: Risk assessment
Rationale: Risk assessment helps evaluate the significance of
identified risks.
8. ________ risk is caused by internal failures such as system
breakdowns or human errors.
ANS: Operational
Rationale: Operational risks stem from issues within
processes, systems, or employee activities.
9. ________ analysis involves evaluating external risks like
political instability and legal changes.
ANS: Environmental
Rationale: Environmental analysis identifies risks arising from
external factors.
©2025
Final Exam Review (Qns & Ans)
2025
1. What is the primary purpose of risk analysis in business?
A. To eliminate all risks entirely
B. To identify, assess, and manage potential threats and
uncertainties
C. To increase operational costs
D. To reduce employee productivity
ANS: B. To identify, assess, and manage potential threats
and uncertainties
Rationale: Risk analysis helps businesses anticipate and
mitigate potential issues, ensuring smoother operations.
©2025
,2. Which of the following is NOT a component of risk
management?
A. Risk identification
B. Risk mitigation
C. Risk exploitation
D. Risk assessment
ANS: C. Risk exploitation
Rationale: Risk management involves identifying, assessing,
and mitigating risks, not exploiting them.
3. What is a risk matrix used for?
A. Comparing competitors’ strengths
B. Evaluating the likelihood and impact of risks
C. Managing employee schedules
D. Tracking marketing performance
ANS: B. Evaluating the likelihood and impact of risks
Rationale: A risk matrix visualizes the severity and probability
of risks to prioritize mitigation strategies.
4. What does “residual risk” refer to?
A. Risks that have been eliminated through mitigation efforts
©2025
, B. Risks that remain after mitigation strategies have been
applied
C. Risks that are irrelevant to organizational goals
D. Risks associated with historical data only
ANS: B. Risks that remain after mitigation strategies have
been applied
Rationale: Residual risks are those left after controls and
mitigation measures are implemented.
5. Which type of risk is associated with market fluctuations and
economic uncertainty?
A. Operational risk
B. Strategic risk
C. Financial risk
D. Compliance risk
ANS: C. Financial risk
Rationale: Financial risk arises due to economic and market
changes that impact an organization’s financial stability.
---
Fill-in-the-Blank Questions
©2025
, 6. ________ involves identifying potential risks that could
negatively impact business operations.
ANS: Risk identification
Rationale: Risk identification is the first step in understanding
threats to business processes.
7. The ________ model estimates risk probability and impact to
determine overall risk exposure.
ANS: Risk assessment
Rationale: Risk assessment helps evaluate the significance of
identified risks.
8. ________ risk is caused by internal failures such as system
breakdowns or human errors.
ANS: Operational
Rationale: Operational risks stem from issues within
processes, systems, or employee activities.
9. ________ analysis involves evaluating external risks like
political instability and legal changes.
ANS: Environmental
Rationale: Environmental analysis identifies risks arising from
external factors.
©2025
