CPFO-Risk Management Questions and Answers(A+ Solution guide)

What is Risk? - The chance of loss. What is Operational Risk? - Risks encountered in the course of delivering government services. What is Speculative Risk? -Risks associated with investments. What is the goal of risk management? - 1 to create a safe workplace; 2 to prevent catastrophic financial loss; 3 to provide budgetary stability What are the benefits of a risk management program? - 1 allows for more effective use of govt funds (than to buy insurance, property replacement, paying liability claims); 2 increases worker productivity; 3 reduces uncertainties associated with future projects. What are the fundamental activities in a risk management program? - 1 risk identification; 2 risk evaluation; 3 risk treatment; 4 implementation What is risk identification? - Determining where there is potential exposure to loss. What is risk evaluation? - Viewing the potential for loss on the basis of frequency and severity of an event. What is risk treatment? - Planning and developing a risk management program using appropriate tools and techniques, such as risk control and risk financing. What is implementation of a risk program? - Taking steps to finance, begin and monitor the program.What risks are unique to public sector? - 1 police/fire are dangerous and have potential for high loss that govt cannot control risk by discontinuing a service; 2 broad scope of services (largest property owner); 3 lacks total control over its environment (cannot limit access to its property)