Risk Management and Types of Risks
Exam Questions and Answers
Lesson Objectives - answer- Define Risk and Risk Management
List and Describe 3 Types of Risks
Know and Understand 4 Basic Ways to
Handle and Control these Risks
List 3 types of Ways to Transfer Risks
Know the Difference Between Risk Avoidance and Risk Acceptance
What is Risk Management? - answer- Risk - The possibility of financial loss
Management - The business function used to plan, organize, and control all available
resources to reach company goals
Risk Management - The systematic process of managing an organization's risk
exposure to achieve objectives in a manner consistent with public interest, human
safety, environmental factors, and the law.
Kinds of Risks - answer- 3 Types Economic Natural Human
Economic Risks - answer- These risks occur from changes in
overall business conditions.
This can include:
amount or type of competitor(s)
changing consumer lifestyle
population changes
government regulations
inflation
recession
Natural Risks - answer- Natural risks are result from natural disasters
or disruptions
floods
tornadoes
hurricanes
fires
droughts
lightning
earthquakes
even sudden abnormal weather conditions
Human Risks - answer- These are caused by human mistakes and errors, as well as
the unpredictability of customers, employees, or the work environment
This could include:
Theft
injury on the job
bad checks
employee error
Exam Questions and Answers
Lesson Objectives - answer- Define Risk and Risk Management
List and Describe 3 Types of Risks
Know and Understand 4 Basic Ways to
Handle and Control these Risks
List 3 types of Ways to Transfer Risks
Know the Difference Between Risk Avoidance and Risk Acceptance
What is Risk Management? - answer- Risk - The possibility of financial loss
Management - The business function used to plan, organize, and control all available
resources to reach company goals
Risk Management - The systematic process of managing an organization's risk
exposure to achieve objectives in a manner consistent with public interest, human
safety, environmental factors, and the law.
Kinds of Risks - answer- 3 Types Economic Natural Human
Economic Risks - answer- These risks occur from changes in
overall business conditions.
This can include:
amount or type of competitor(s)
changing consumer lifestyle
population changes
government regulations
inflation
recession
Natural Risks - answer- Natural risks are result from natural disasters
or disruptions
floods
tornadoes
hurricanes
fires
droughts
lightning
earthquakes
even sudden abnormal weather conditions
Human Risks - answer- These are caused by human mistakes and errors, as well as
the unpredictability of customers, employees, or the work environment
This could include:
Theft
injury on the job
bad checks
employee error
