RSK2601
TEST BANK
,RSK2601: ENTERPRISE RISK MANAGEMENT
TEST BANK
Section 1: Multiple-choice questions 1–20
Question 1
Which of the following is an advantage of managing risks and opportunities effectively?
1. Greater certainty about profits
2. An increase in shareholder value
3. Greater confidence among stakeholders
4. Reduced economic returns
Correct answer: 3) Greater confidence among stakeholders
Explanation: Effective risk and opportunity management can improve cost predictability,
support sustainable shareholder value, strengthen stakeholder confidence and
contribute to better economic returns.
Question 2
Corporate governance policies should be guided by the board towards achieving …
1. Sustainable, long-term growth in shareholder value
2. Sustainable, short-term growth in shareholder value
3. Sustainable, short-term growth in stakeholder value
4. Sustainable, long-term growth in stakeholder value
Correct answer: 1) Sustainable, long-term growth in shareholder value
Explanation: The board should promote governance practices that support the lasting
growth of shareholder value rather than prioritising short-term gains.
, Question 3
Which of the following is not regarded as a benefit of Enterprise Risk Management
(ERM)?
1. Reducing unexpected operational events and losses
2. Strengthening corporate governance
3. Meeting applicable legal and regulatory obligations
4. Aligning return appetite with strategy
Correct answer according to the source: 4) Aligning return appetite with strategy
Explanation: The source identifies reduced operational surprises and losses, stronger
corporate governance and compliance with legal requirements as ERM benefits. It also
explains that aligning risk appetite with strategy is important to ERM. Therefore, the
supplied question appears internally inconsistent because option 4 is also a recognised
ERM benefit. The answer key has been retained, but this item should be checked
against your prescribed study material.
Question 4
The King II Report replaced which bottom-line approach with which alternative?
1. Double bottom line with triple bottom line
2. Single bottom line with triple bottom line
3. Single bottom line with double bottom line
4. Double bottom line with single bottom line
Correct answer: 2) Single bottom line with triple bottom line
Explanation: The source explains that King II moved away from a single bottom-line
approach towards the triple bottom line, which considers economic, social and
environmental performance.
TEST BANK
,RSK2601: ENTERPRISE RISK MANAGEMENT
TEST BANK
Section 1: Multiple-choice questions 1–20
Question 1
Which of the following is an advantage of managing risks and opportunities effectively?
1. Greater certainty about profits
2. An increase in shareholder value
3. Greater confidence among stakeholders
4. Reduced economic returns
Correct answer: 3) Greater confidence among stakeholders
Explanation: Effective risk and opportunity management can improve cost predictability,
support sustainable shareholder value, strengthen stakeholder confidence and
contribute to better economic returns.
Question 2
Corporate governance policies should be guided by the board towards achieving …
1. Sustainable, long-term growth in shareholder value
2. Sustainable, short-term growth in shareholder value
3. Sustainable, short-term growth in stakeholder value
4. Sustainable, long-term growth in stakeholder value
Correct answer: 1) Sustainable, long-term growth in shareholder value
Explanation: The board should promote governance practices that support the lasting
growth of shareholder value rather than prioritising short-term gains.
, Question 3
Which of the following is not regarded as a benefit of Enterprise Risk Management
(ERM)?
1. Reducing unexpected operational events and losses
2. Strengthening corporate governance
3. Meeting applicable legal and regulatory obligations
4. Aligning return appetite with strategy
Correct answer according to the source: 4) Aligning return appetite with strategy
Explanation: The source identifies reduced operational surprises and losses, stronger
corporate governance and compliance with legal requirements as ERM benefits. It also
explains that aligning risk appetite with strategy is important to ERM. Therefore, the
supplied question appears internally inconsistent because option 4 is also a recognised
ERM benefit. The answer key has been retained, but this item should be checked
against your prescribed study material.
Question 4
The King II Report replaced which bottom-line approach with which alternative?
1. Double bottom line with triple bottom line
2. Single bottom line with triple bottom line
3. Single bottom line with double bottom line
4. Double bottom line with single bottom line
Correct answer: 2) Single bottom line with triple bottom line
Explanation: The source explains that King II moved away from a single bottom-line
approach towards the triple bottom line, which considers economic, social and
environmental performance.
