RSK 2601 TEST BANK ENTERPRISE RISK MANAGEMENT QUESTIONS AND
ANSWERS
Sample Questions and Answers
1. What is the primary objective of Enterprise Risk Management (ERM)?
A) To minimize financial losses
B) To identify and manage risks across the entire organization
C) To comply with regulatory requirements
D) To ensure employee safety
Answer: B) To identify and manage risks across the entire organization
Explanation: ERM aims to provide a holistic approach to risk management by addressing risks
in all areas of an organization to support strategic objectives.
2. Which of the following is a key component of the ERM framework?
A) Risk identification
B) Risk retention
C) Risk avoidance
D) Risk transfer
Answer: A) Risk identification
Explanation: Risk identification is fundamental in ERM as it helps in recognizing potential risks
that could impact the organization’s objectives.
3. What is the purpose of risk assessment in ERM?
A) To determine the financial impact of risks
B) To prioritize risks based on their likelihood and impact
C) To eliminate all identified risks
D) To document risk management policies
Answer: B) To prioritize risks based on their likelihood and impact
Explanation: Risk assessment involves evaluating risks to prioritize them so that the
organization can focus on the most significant threats.
ANSWERS
Sample Questions and Answers
1. What is the primary objective of Enterprise Risk Management (ERM)?
A) To minimize financial losses
B) To identify and manage risks across the entire organization
C) To comply with regulatory requirements
D) To ensure employee safety
Answer: B) To identify and manage risks across the entire organization
Explanation: ERM aims to provide a holistic approach to risk management by addressing risks
in all areas of an organization to support strategic objectives.
2. Which of the following is a key component of the ERM framework?
A) Risk identification
B) Risk retention
C) Risk avoidance
D) Risk transfer
Answer: A) Risk identification
Explanation: Risk identification is fundamental in ERM as it helps in recognizing potential risks
that could impact the organization’s objectives.
3. What is the purpose of risk assessment in ERM?
A) To determine the financial impact of risks
B) To prioritize risks based on their likelihood and impact
C) To eliminate all identified risks
D) To document risk management policies
Answer: B) To prioritize risks based on their likelihood and impact
Explanation: Risk assessment involves evaluating risks to prioritize them so that the
organization can focus on the most significant threats.
