RSK2601 EXAM

1. The variation between actual and expected results is known as? a) Subjective risk b) Uncertainty c) Probability d) Risk 2. A measure of risk per unit of expected return is the? a) Standard deviation b) Coefficient of variation c) Correlation coefficient d) Variance 3. Dense fog that increases the chance of an automobile accident is an example of a a) Speculative risk b) Peril c) Physical hazard d) Moral hazard 4. Indicate the correct statement a) An example of peoples risk is fraud and theft b) Poor data integrity is an example of systems risk c) Process risk is the risk of a business process being inadequate and causing unexpected losses d) Operational risk is the exposure of an enterprise to losses resulting from external failures or short comings of people, processes and systems 5. Corporate governance aims at a) Promoting the inefficient use of resources b) Attracting higher cost of capital c) Retarding overall performance d) Ensuring adherence to legislation 6. With reference to the King III Code of governance principles, indicate the correct statement a) Internal audit should provide dependent assurance on the risk management process b) Risk management should be performed on an ongoing basis c) Compliance should not form part of the risk management process d) Risk management is separate from the company’s strategic business process © Edge | (RSK2601) | Presented by: Charles Lesia | Date: (2014, May, Semester 1) RSK2601 EXAM 7. The … risk management approach effectively integrates the efforts of operating managers with activities of risk managers a) Traditional b) Business c) Enterprise d) Operational 8. Which of the following is not a category of risk management objectives a) Strategic b) Reporting c) Operational d) Compliance 9. Which of the following characterizes Enterprise Risk Management a) Emphasis on insurance and derivatives as risk transfer techniques b) Focus on individual risk and group of related risk c) Integrating operational and strategic activities d) Functional approach to risk management 10. … Risk is avoidable through proper diversification a) Portfolio b) Systematic c) Unsystematic d) Political 11. The risk that a counterparty to a contract will not live up to its contractual obligations is known as: a) Liquidity risk b) Credit risk c) Counterparty risk d) Default risk 12. Which one of the following is not a benefit of operational risk management? a) Improving ability to achieve business objectives. b) Maximizing day-to-day profits. c) Providing management the opportunity to focus on revenue generating activities. d) Minimizing day-to-day losses. 13. Information technology consists of the following: