RSK2601 EXAM PACK 2026 MCQ STUDY
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RSK2601: Principles of Risk Management - Practice Question Bank (100
Q&A)
Theme 1: Introduction to Risk Management & Key Concepts
1. What is the most comprehensive definition of 'risk' in a modern
business context?
a) The possibility of something bad happening.
b) The effect of uncertainty on objectives.
c) The chance of a financial loss.
d) An unpredictable event that causes harm.
b) The effect of uncertainty on objectives.
2. The two primary categories of risk are?
a) Financial and Non-Financial
b) Pure and Speculative
c) Insurable and Uninsurable
d) Internal and External
b) Pure and Speculative
3. A 'Pure Risk' is best described as a situation where:
a) There is a chance of loss or no loss, but no chance of gain.
b) There is a chance of loss or gain.
c) The risk is always avoidable.
d) The risk is related to financial speculation.
a) There is a chance of loss or no loss, but no chance of gain.
4. Speculating on the stock market is a classic example of:
a) Pure Risk
b) Fundamental Risk
c) Static Risk
, d) Speculative Risk
d) Speculative Risk
5. What is the key difference between 'risk' and 'uncertainty'?
a) Risk can be measured, while uncertainty cannot.
b) They are the same thing.
c) Uncertainty always leads to loss.
d) Risk is only for large corporations.
a) Risk can be measured, while uncertainty cannot.
6. The term 'peril' refers to:
a) The conditions that increase the frequency or severity of a loss.
b) The cause of a loss.
c) The chance of a loss occurring.
d) The actual financial cost of a loss.
b) The cause of a loss.
7. What is a 'hazard'?
a) The same as a peril.
b) A condition that increases the probability or severity of a loss.
c) The outcome of a risk event.
d) A type of speculative risk.
b) A condition that increases the probability or severity of a loss.
8. Slippery floors in a warehouse are an example of a:
a) Physical Hazard
b) Moral Hazard
c) Morale Hazard
d) Peril
a) Physical Hazard
9. An individual intentionally faking an accident to claim insurance is an
example of:
a) Physical Hazard
b) Moral Hazard
c) Morale Hazard
, d) Speculative Risk
b) Moral Hazard
10.Leaving car doors unlocked because "it's insured anyway" is an
example of:
a) Physical Hazard
b) Moral Hazard
c) Morale Hazard
d) Pure Risk
c) Morale Hazard
Theme 2: The Risk Management Process
11.What is the first and most critical step in the risk management process?
a) Risk Evaluation
b) Risk Identification
c) Selection of Risk Treatment Techniques
d) Risk Monitoring
b) Risk Identification
12.Which risk management process step involves estimating the potential
frequency and severity of losses?
a) Risk Identification
b) Risk Evaluation
c) Risk Analysis
d) Risk Treatment
c) Risk Analysis
13.After risks are analyzed, they are ranked and compared to predefined
criteria. This step is called:
a) Risk Identification
b) Risk Treatment
c) Risk Evaluation
d) Risk Financing
c) Risk Evaluation
GUIDE COMPLETE ANSWERS || 100%
GUARANTEED PASS <RECENT VERSION>
RSK2601: Principles of Risk Management - Practice Question Bank (100
Q&A)
Theme 1: Introduction to Risk Management & Key Concepts
1. What is the most comprehensive definition of 'risk' in a modern
business context?
a) The possibility of something bad happening.
b) The effect of uncertainty on objectives.
c) The chance of a financial loss.
d) An unpredictable event that causes harm.
b) The effect of uncertainty on objectives.
2. The two primary categories of risk are?
a) Financial and Non-Financial
b) Pure and Speculative
c) Insurable and Uninsurable
d) Internal and External
b) Pure and Speculative
3. A 'Pure Risk' is best described as a situation where:
a) There is a chance of loss or no loss, but no chance of gain.
b) There is a chance of loss or gain.
c) The risk is always avoidable.
d) The risk is related to financial speculation.
a) There is a chance of loss or no loss, but no chance of gain.
4. Speculating on the stock market is a classic example of:
a) Pure Risk
b) Fundamental Risk
c) Static Risk
, d) Speculative Risk
d) Speculative Risk
5. What is the key difference between 'risk' and 'uncertainty'?
a) Risk can be measured, while uncertainty cannot.
b) They are the same thing.
c) Uncertainty always leads to loss.
d) Risk is only for large corporations.
a) Risk can be measured, while uncertainty cannot.
6. The term 'peril' refers to:
a) The conditions that increase the frequency or severity of a loss.
b) The cause of a loss.
c) The chance of a loss occurring.
d) The actual financial cost of a loss.
b) The cause of a loss.
7. What is a 'hazard'?
a) The same as a peril.
b) A condition that increases the probability or severity of a loss.
c) The outcome of a risk event.
d) A type of speculative risk.
b) A condition that increases the probability or severity of a loss.
8. Slippery floors in a warehouse are an example of a:
a) Physical Hazard
b) Moral Hazard
c) Morale Hazard
d) Peril
a) Physical Hazard
9. An individual intentionally faking an accident to claim insurance is an
example of:
a) Physical Hazard
b) Moral Hazard
c) Morale Hazard
, d) Speculative Risk
b) Moral Hazard
10.Leaving car doors unlocked because "it's insured anyway" is an
example of:
a) Physical Hazard
b) Moral Hazard
c) Morale Hazard
d) Pure Risk
c) Morale Hazard
Theme 2: The Risk Management Process
11.What is the first and most critical step in the risk management process?
a) Risk Evaluation
b) Risk Identification
c) Selection of Risk Treatment Techniques
d) Risk Monitoring
b) Risk Identification
12.Which risk management process step involves estimating the potential
frequency and severity of losses?
a) Risk Identification
b) Risk Evaluation
c) Risk Analysis
d) Risk Treatment
c) Risk Analysis
13.After risks are analyzed, they are ranked and compared to predefined
criteria. This step is called:
a) Risk Identification
b) Risk Treatment
c) Risk Evaluation
d) Risk Financing
c) Risk Evaluation
