BP Risks

Question 1

What is a risk?

Answer 1

An uncertain event or condition which, if it occurs, could have positive or negative impact on at least one business objective (Is linked to business objective).

Question 2

What is identified during risk analysis?

Answer 2

1. Likelihood
2. Impact

Question 3

What are the 5 ways organisations can respond to risk?

Answer 3

1. Avoid
2. Accept
3. Transfer
4. Mitigate - accept but plan for reduced impact through controls
5. Exploit - maximise impact of opportunity

Question 4

What is risk appetite?

Answer 4

How much risk acceptable.

Question 5

What is the term for “how much risk is acceptable”?

Answer 5

Risk appetite

Question 6

What are the 4 angles when looking at the risk appetite of an organisation?

Answer 6

1. Current risk profile
2. Risk capacity - how much risk can we accept
3. Risk tolerance - Given risk capacity, what is the variation level of risk we’re willing to accept
4. Attitude towards risk - view on growth, risk & return