D368 Enterprise Risk Management - Set 2 - Part 1

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 1: A company’s chief financial officer (CFO) is conducting a debt risk assessment. What should the CFO prioritize in this assessment?

Interest rate volatility

Employee benefits

Marketing expenses

Supply chain structure

Question 2: A multinational corporation is expanding into a country with high currency volatility. What should the company do to manage this risk?

Risk avoidance

Risk sharing

Risk transfer

Risk mitigation

Question 3: A company is conducting a scenario planning exercise to test its resilience against supply chain disruptions. What should the company focus on in this scenario planning?

Employee morale

Advertising costs

Supplier reliability

Market expansion

Question 4: A business is exploring market entry into a politically unstable region. Which strategy would most effectively reduce the company’s exposure to risk?

Entering without partners

Risk avoidance

Risk retention

Risk sharing through joint ventures

Question 5: A company is using key risk indicators (KRIs) to monitor operational risks. What is an important factor to consider when designing KRIs?

Employee benefits

External market trends

Risk thresholds and early warning signals

Customer satisfaction

Question 6: A company has experienced increasing equipment breakdowns and is considering purchasing insurance. What is the company attempting to do?

Risk avoidance

Risk retention

Risk transfer

Risk sharing

Question 7: A retail company is facing a decrease in customer demand. What type of risk does this scenario reflect?

Credit risk

Operational risk

Market risk

Financial risk

Question 8: A company is implementing dynamic risk assessment techniques to assess its AI platform launch. What is the primary focus of dynamic risk assessment?

Employee training

Flexibility in adapting to evolving risks

Increasing advertising budget

Reducing production costs

Question 9: A financial institution is determining the credit risk of its borrowers. What early indicator should the institution monitor?

Increased marketing spend

Extended payment cycles

Decreased employee satisfaction

Declining customer reviews

Question 10: A company expanding its services into a new region is conducting a risk assessment. Which factor should be prioritized?

Employee satisfaction

Supply chain resilience

Advertising spend

Management salaries

Question 11: A company with increasing market competition is evaluating whether to launch a new product. Which risk factor should the company assess first?

Competitor actions

Employee turnover

Current production capacity

Customer loyalty programs

Question 12: A business is developing a risk map to assess operational risks. What should the company plot on the map?

Employee satisfaction scores

The likelihood and impact of each risk

Marketing expenses

Production costs

Question 13: A company is assessing its exposure to exchange rate fluctuations in international markets. What should the company consider to mitigate this risk?

Risk transfer

Hedging strategies

Market expansion

Increasing salaries

Question 14: A company is expanding its operations into a region with frequent natural disasters. What risk management strategy should the company consider?

Risk avoidance

Risk sharing

Risk retention

Risk transference through insurance

Question 15: A company is developing a new product, and the risk management team is assessing the market conditions. What should they focus on first?

Employee training programs

Customer demand and market trends

Production cost analysis

Management salaries

Question 16: A company is developing a long-term risk management strategy to prepare for market volatility. What should be the primary focus?

Expanding into new markets

Increasing production capacity

Building financial reserves

Monitoring key risk indicators

Question 17: A retail company is expanding its product line and conducting a risk evaluation. What additional information should the company consider in this evaluation?

Marketing budget

Employee turnover

Market trends and customer behavior

Production costs

Question 18: A company is experiencing frequent equipment failures that are affecting production. What corrective action should the company take?

Hire more employees

Purchase new equipment

Cease production temporarily

Ignore the issue

Question 19: A company is using scenario planning to assess the impact of geopolitical risks on its operations. What should be the primary focus of this assessment?

Employee benefits

Political stability and regulatory changes

Production costs

Market expansion

Question 20: A company is evaluating the impact of currency fluctuations on its international operations. What risk mitigation strategy should the company implement?

Hedging

Increasing salaries

Expanding product lines

Ceasing operations in affected regions

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