D368 Enterprise Risk Management - Set 3 - 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 multinational company is assessing the potential risks of operating in a region with economic instability. What should the company prioritize in its risk management strategy?

Employee satisfaction

Hedging against currency fluctuations

Reducing advertising costs

Increasing employee benefits

Question 2: A company is conducting a risk assessment to address rising geopolitical tensions in one of its key markets. What is the best approach to mitigate these risks?

Risk avoidance by exiting the market

Risk transference through insurance

Ignoring the risks and focusing on profits

Increasing marketing efforts

Question 3: A tech company is considering the launch of a new product. What is the first step the company should take in its risk management process?

Increase advertising

Assess market demand and competition

Hire additional employees

Develop new internal policies

Question 4: A company is expanding into a foreign market with high regulatory risks. What strategy should the company implement to mitigate these risks?

Increase production

Form partnerships with local entities

Reduce employee wages

Expand advertising efforts

Question 5: A retailer is using key risk indicators (KRIs) to monitor inventory risks. What is a crucial element to include in the KRI design?

Employee turnover rate

Early warning signals for low stock levels

Customer satisfaction

Supplier relations

Question 6: A company is evaluating risks related to cybersecurity breaches. What is the best initial step in mitigating these risks?

Conduct employee training on cybersecurity

Increase marketing budget

Purchase additional servers

Expand customer support teams

Question 7: A financial institution is considering offering loans to high-risk clients. What risk management approach should the institution prioritize?

Risk retention

Risk transference

Risk avoidance

Risk reduction through stringent credit checks

Question 8: A company is assessing the impact of climate change on its operations. What risk mitigation strategy should it consider?

Increase employee salaries

Relocate operations to regions with lower climate risk

Focus on short-term profitability

Ignore the risk and continue operations as usual

Question 9: A company is developing a contingency plan to address supply chain disruptions. What is the most important element to consider in this plan?

Employee training programs

Identifying alternative suppliers

Increasing marketing efforts

Expanding product lines

Question 10: A company is evaluating its risk appetite in relation to a potential acquisition. What should the company assess first?

Employee benefits

Financial risks and return on investment

Marketing costs

Customer feedback

Question 11: A company is using scenario planning to assess the risks of entering a new market. What should the company focus on first?

Employee satisfaction

Regulatory and political risks

Expanding product lines

Reducing marketing costs

Question 12: A company is developing a business continuity plan. What is the most important step in this process?

Identify critical business functions

Increase employee benefits

Develop new marketing strategies

Conduct employee satisfaction surveys

Question 13: A company is evaluating the risks of launching a new marketing campaign. What should the risk management team assess first?

Customer behavior and market trends

Employee benefits

Supplier relations

Production costs

Question 14: A company is implementing a risk management framework for its cybersecurity risks. What is the first step the company should take?

Increase employee salaries

Conduct a vulnerability assessment

Expand marketing efforts

Hire more customer service representatives

Question 15: A company is expanding its operations into a region prone to natural disasters. What should the company prioritize in its risk management plan?

Risk retention

Risk transference through insurance

Increasing production

Expanding employee benefits

Question 16: A company is developing a strategy to mitigate financial risks associated with fluctuating commodity prices. What should the company prioritize?

Employee training

Hedging against price fluctuations

Increasing marketing budget

Expanding product lines

Question 17: A company is using key risk indicators (KRIs) to monitor operational risks. What is the most important element to include in the KRIs?

Employee satisfaction

Early warning signals for potential disruptions

Supplier relations

Marketing expenses

Question 18: A company is evaluating its risk tolerance in relation to a new product launch. What is the most important factor to assess?

Market demand and competition

Employee benefits

Production costs

Supplier relations

Question 19: A company is developing a risk map for its supply chain. What should the company focus on when creating this map?

Employee satisfaction

The likelihood and impact of each risk

Marketing expenses

Supplier contracts

Question 20: A company is assessing the risks of entering a new market with strict regulatory requirements. What should the company prioritize in its risk management strategy?

Employee satisfaction

Compliance with local regulations

Expanding product lines

Increasing marketing budget

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