chapter 10

Question 1

risks?

Answer 1

possible variation in the outcomes from what is expected

Question 2

pure risk?

Answer 2

when outcomes are worse than anticipated

Question 3

opportunity risk?

Answer 3

when outcomes are better off from what was anticipated

Question 4

risk formula?

Answer 4

likelihood x impact

Question 5

risk management process?

Answer 5

-Set strategic objective
-check risk appetite
-risk identification
-risk assessment evaluation
-risk monitoring and reporting
-review and feedback.

Question 6

TARA model?

Answer 6

used to assess and evaluate risk:
-Transfer
-Avoidance
-Reduction
-Acceptance

Question 7

transfer and avoidance?

Answer 7

transfer the risks to third party such as insurance and avoid the risk while doing so

Question 8

reduction and acceptance?

Answer 8

this includes implementing risk-mitigating activities and accepting low risks.

Question 9

Miles and snows topology?

Answer 9

-Reactors: inconsistent and risk averse
-Defenders: narrow focus and low risk takers
-Analysers: stable + innovative balance, moderate risk
-Prospectors: entrepreneurial and high risk takers.

Question 10

break even analysis?

Answer 10

when profit =0

Question 11

sensitivity analysis?

Answer 11

estimated profit / cash flow statements

Question 12

expected values?

Answer 12

where average value is positive, you should consider accepting the