University of South Africa RSK2601 TEST BANK

RSK2601 TEST BANK
Question 1
Which one of the following is a benefit of effective risk and opportunity management?
1) Improved profit certainty
2) Increased shareholder value
3) Increased stakeholder confidence Correct option 3
4) Lower economic

returns Explanation

Improved cost certainty, sustainable shareholder value, increased stakeholder confidence and
higher economic returns are all benefits of effective risk and opportunity management.


Question 2
The board‟s role should be to steer the corporation towards corporate governance
policies that support …
1) long-term sustainable growth in shareholder value Correct option 1
2) short-term sustainable growth in shareholder value
3) short-term sustainable growth in stakeholder value
4) long-term sustainable growth in stakeholder

value Explanation

The board‟s role should be to steer the corporation towards corporate governance
policies that support long-term sustainable growth in shareholder value.

Question 3
Which one of the following statements is not considered a benefit of Enterprise Risk
Management (ERM)?
1) Minimise operational surprises and losses.
2) Enhance corporate governance.
3) Comply with relevant legal and regulatory requirements.
4) Align return appetite and strategy. Correct option 4

Explanation

Benefits of Enterprise Risk Management (ERM) include minimisation of operational
surprises and losses, enhancing corporate governance, complying with relevant legal and
regulatory requirements and aligning risk appetite and strategy. The determination of the
risk appetite of a business is vital in the ERM process because it shows how much risk
the business is willing to take on.

Question 4
The King II report moved away from the … bottom-line principle to a … bottom-line principle.
1) double - triple
1

,2) single - triple Correct option 2
3) single - double
4) double – single




2

,Explanation

The King II report moved away from the single bottom-line principle to a triple bottom-line
principle.

Question 5
As of June 2010, companies listed on the JSE are expected to comply with …
1) King I
2) King II
3) King III Correct option 3
4) King

IV

Explanation

As of June 2010, companies listed on the JSE are expected to comply with King III.

Question 6
King III applies to …

a) All listed companies on the JSE
b) Banks
c) Financial institutions
d) Insurance institutions

Choose the correct option.
1) a, b, c, d
2) a, b, c
3) a, b, d Correct option 3
4) a, b

Explanation
King III applies to all listed companies on the JSE, banks, financial and insurance institutions.


Question 7
In financial ratio analysis, efficiency ratios …
1) measures the degree of success of the management in achieving their primary
purpose of creating wealth for their owners
2) are also known as activity ratios correct option 2
3) examine the relationship between liquid resources held and creditors due for
payment in the near future
4) assess the returns and performance of shares held in a particular business

Explanation
In financial ratio analysis, efficiency ratios are also known as activity ratios.

Question 8
A GAP analysis …
1) is used to list all the risks that were identified on previous projects within the business
3

, 2) is a list that categorises each risk into a type of area
3) can be used to identify the main risks linked to a certain activity or project of the business
Correct option 3




4