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Question 1
(2D1-LS28)
An organization is currently reviewing primary risk factors. This organization is at which step in the
Risk Management Process (RMP)?
Question 2
(2D1-LS29)
Question 3
(2D1-LS31)
An organization can mitigate the risk of financial loss from natural disasters by purchasing:
Your Answer
Hazard insurance.
Health insurance.
Liability insurance.
Question 4
(2D1-LS23)
There are many strategies for risk response that an organization may choose from to reduce risk to
an acceptable level. Which action would not reduce risk for an organization?
Question 5
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(2D1-AT18)
Question 6
(2D1-AT19)
Within a financial risk management context, the term Value at Risk (VAR) is defined as the:
Question 7
(2D1-LS30)
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Risk assessment is a function of management's attitude toward risk. A risk averse management
team typically:
Question 8
(2D1-LS27)
Which of the following is not a key step in the Risk Management Process (RMP)?
Your Answer
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Question 9
(2D1-LS37)
The key components of enterprise risk management (ERM) include all of the following except:
Assess risks.
Monitor risk.
Your Answer
Question 10
(2D1-AT16)
Which of the following is not an example of a form of political risk associated with foreign direct
investment?
Your Answer
Uncontrolled inflation.
Civil war.
Nationalization of factories.
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Question 11
(2D1-LS35)
To create, protect, and enhance shareholder value by managing uncertainties is the major goal of:
Risk assessment.
Your Answer
Question 12
(2D1-LS25)
Risk that remains after all attempts management might take to mitigate them are commonly
called:
Inherent risk.
Financial risk.
Operational risk.
Your Answer
Residual risk.
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task, management develops a residual risk profile that identifies the risks that will remain
even after inherent risks have been dealt with.
Question 13
(2D1-LS39)
The COSO ERM framework includes eight interrelated components. Which component in the
framework implements policies and procedures to help ensure that risk responses are effectively
carried out?
Risk assessment.
Your Answer
Control activities.
Objective setting.
Event identification.
Question 14
(2D1-LS34)
All of the following are investment options that an organization can use to reduce and mitigate
financial risk except:
Arbitrage.
Maturity matching.
Hedging.
Your Answer
Speculation.
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Question 15
(2D1-LS24)
When a company purchases property and casualty insurance, they are attempting to mitigate risk
by practicing:
Risk avoidance.
Your Answer
Risk transfer.
Operational risk.
Exploiting risks.
Question 16
(2D1-LS38)
The COSO ERM framework includes eight interrelated components. Which component in the
framework identifies an organization's risk management philosophy, integrity, and ethical values?
Your Answer
Internal environment.
Risk assessment.
Objective setting.
Monitoring.
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Question 17
(2D1-AT21)
The Enterprise Risk Management (ERM)–Integrated Framework released by COSO expands upon
the 1992 COSO model and provides for a more robust and extensive focus on enterprise risk
management. Which of the following components are included in the ERM framework?
II only.
III only.
Your Answer
II and III.
I only.
Question 18
(2D1-AT20)
Which of the following best explains why international business may increase risk?
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The international business is faced with legal and financial risks not faced by
domestic companies.
Question 19
(2D1-LS17)
Organizations face many different types of risk. Risks that relate to natural disasters such as
storms, floods, hurricanes, blizzards, earthquakes, and volcanoes are commonly called:
Operational risks.
Financial risks.
Your Answer
Hazard risks.
Strategic risks.
Question 20
(2D1-LS40)
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The COSO ERM framework includes eight interrelated components. The component called risk
response includes:
Correct
Question 21
(2D1-CQ02)
A firm is constructing a risk analysis to quantify the exposure of its data center to various types of
threats. Which one of the following situations would represent the highest annual loss exposure
after adjustment for insurance proceeds?
Your Answer
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Question 22
(2D1-LS33)
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Question 23
(2D1-LS32)
An organization can mitigate the risk of financial loss from consumer product injuries by
purchasing:
Health insurance.
Your Answer
Liability insurance.
Hazard insurance.
Question 24
(2D1-LS36)
Direct benefits of enterprise risk management (ERM) include all of the following except:
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Question 25
(2D1-LS26)
Question 26
(2D1-CQ01)
An organization would like to quantify the expected loss that may occur from two events. A
systems analyst estimates that the potential monetary loss from unauthorized alteration of
confidential information in their product development database could be $2,000,000 and has a 5%
likelihood of occurrence. In addition, there is a maximum potential loss of $5,000,000 with a 1%
likelihood of occurrence if the entire computer lab is destroyed by fire. The total expected loss of
these events is:
$0.
$50,000.
$100,000.
Your Answer
$150,000.
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Question 27
(2D1-LS22)
If a company determines that a particular risk could result in a loss of up to $50,000 and the
company is willing to spend up to $50,000 to mitigate the risk, this loss is commonly called all of
the following except:
Question 28
(2D1-AT17)
All of the following are valid reasons for expansion of international business by U.S. multinational
corporations, except to:
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