Module 2. The 5 Key Elements of Risk Management

Question 1

What are the 5 key elements of risk management?

Answer 1

(1) Identify the risk
(2) Analyze the risk
(3) Evaluate the Risk and Risk Assessment
(4) Treat the risk
(5) Monitor and Review the Risk

Question 2

This is the initital step in the risk management process, which assess the risk that the business is exposed to in its operating environment.

Answer 2

Identify the Risk

Question 3

After identifying the risk, what is the next step that involves determining the scope of the risk and understanding how it connects to various factors within the organization.

Answer 3

Analyze the risk.

Question 4

Analyzing the risk involves assessing the ___________ of the risk, you need to see how many business functions it affects. Some risks could halt the entire business, while others might only cause minor inconveniences.

Answer 4

severity

Question 5

By analyzing the risks, we can MAP out the situtation…

Answer 5

M- minimize the impact of negative events
A - assess if the project’s benefit outweigh its risks before starting.
P - plan the company’s response to emergencies.

Question 6

Steps in Analyzing the risk

Answer 6

1. Identify the risk
2. Define levels of uncertainty
3. Estimate the impact of uncertainty
4. Complete the risk analysis model
5. Analyze the results
6. Implement the solution

Question 7

In evaluating the risk and risk assessment, risks needs to be _________ and __________.

Answer 7

ranked and prioritized

Question 8

Most risk management solutions have different categories of risks, depending on the _________ of the risk.

Answer 8

severity

Question 9

A risk that may cause some inconvenience is rated _______.

Answer 9

lowly

Question 10

Risk are rated the highest when it can result to a __________

Answer 10

catasstrophic loss

Question 11

It is important to ran risks because it allows the organization to gain a holistic view of the risk exposure of the whole organization.

Answer 11

Evaluate the risk and risk assessment

Question 12

True or False

The business my be vulnerable to several low-level risks, but it may not require upper management intervention.

Answer 12

True

Question 13

On the other hand, just one of the highest-rated risks is enough to require _______________.

Answer 13

intermediate intervention

Question 14

There are two types of risk assessment:

Answer 14

(1) Qualitative Risk Assessment
(2) Quantitative Risk Assessment

Question 15

Evaluating the risks that can’t easily be measured with numbers. Based on opninions and no hard data.

Answer 15

Qualitative Risk Assessment

Question 16

Evaluating the risk that can be measured with numbers. Easy to automate and has concrete data.

Answer 16

Quantitative Risk Assessment

Question 17

Treating the risks involves: (3)

Answer 17

1. Risk Elimination or Containment
2. Manual Risk Management
3. Risk Management Solution

Question 18

Eliminating or containing the rissk and collaboration with experts.

Answer 18

Risk Elimination or Containment

Question 19

Setting up meetings, fragmented communication

Answer 19

Manual Risk Management

Question 20

Involves system notifications, centralized discussion, management oversight, direct updates

Answer 20

Risk Management Solution

Question 21

Ensures that everything within that process together with the risks that is seeking to address are working effectively and efficiently.

Answer 21

Monitor and review the risk

Question 22

are strategies implemented to address and mitigate identiied rissks.

Answer 22

Remedies/Solutions

Question 23

What are the four remedies or strategies in risk management?

Answer 23

1. Risk Avoidance
2. Risk Retention/Acceptance
3. Risk Reduction
4. Risk Transfer

Question 24

Where in the organization seeks to eliminate the potential risk and the potential for damages and financial consequences of a threatening event.
Examples of this as part of the risk treatment strategy are to change your processes, equipment, or materials

Answer 24

Risk Avoidance

Question 25

Acknowledgment of a risk as a given. Usually, this is a cost to help offset larger risks down the road. In many cases, businesses choose to pay their losses out of pocket instead of purchasing insurance.

Answer 25

Risk Retention/Acceptance

Question 26

Minimize the loss, rather than completely eliminate it. While accepting the risk, it stays focused on keeping the loss contained and preventing it from spreading. An example of this are medical care, installing safety equipment and enhancing cybersecurity measures

Answer 26

Risk Reduction

Question 27

is related to passing a specific portion of the threat to another party to reduce its likelihood or impact on the organization. However, it's vital that another party - for example, an insurance company - is informed about the consequences of the sharing, the impact of the risk, and the expected transfer cost.

Answer 27

Risk Transfer

Question 28

Examples of risks in financial institutions

Answer 28

1. Credit risk 2. Operational risk

Question 29

A bank conducts rigorous credit assessments before granting loans, evaluating factors such as the borrower's credit score, income stability, and debt-to-income ratio. This thorough vetting process helps the bank minimize the likelihood of defaults.

Answer 29

Credit Risk Assessments

Question 30

A bank implements a comprehensive risk management framework that includes regular training programs for employees on risk awareness and compliance. It also uses advanced risk management software to detect and respond to potential operational risks in realtime

Answer 30

Operational risk

Question 31

Examples of Common risks

Answer 31

1. Health risk - injuries, illness, poor lifestyle 2. Financial risks - job loss, debt, unexpected expenses and investment losses. 3. Environmental risks - naural disasters, pollution, and climiate change impacts. 4, Emotional risks - stress, grief, burnot from life's pressures. 5. Legal risks - accidental lawbreaking, legal disputes and contract issues. 6. Social risks - relationship conflicts, peer pressure, and social isolation.