RMI 2302 Nyce Module 8 Exam Questions With Verified Answers

RMI 2302 Nyce Module 8 Exam Questions With Verified Answers Business risk - answerDeviations in profitability. This is a very broad category of risk that is caused by operational, hazard, financial, or strategic risks. Business risk can be caused by: - answer• Prices • Regulation • Competition, etc Operation risk - answerPotential losses from internal sources: • Manufacturing processes • Fraud • Mismanagement • Employee mistakes Hazard risk - answerTypically used in insurance industry to describe potential losses that only have a down side (pure risks), • Example: Fires, auto accidents, tornados, earthquakes, etc. • Very traditional risk management term • More broad than simply personnel safety Financial risk - answerPotential variation due to financial causes • Examples: losses due to exchange rate, investment losses, credit risks, liquidity risks, etc. Strategic risks - answerPotential losses (variation) from poor business decisions: o Product mix o Supplier choice o Financing options • Many decisions fall under "strategy", if any of them are wrong/faulty there is strategic risk • Reputational risk can be associated with strategic risk, but can often be a separate classification