D368 Enterprise Risk Management - Set 5 - Part 1

Correct Answer: Credit risk and customer default probabilities

Assessing credit risk and the likelihood of customer defaults is critical to understanding the potential financial impact of offering the new product.

Correct Answer: Political and regulatory risks

Political and regulatory risks can significantly impact overseas operations, making them a key priority in business continuity planning.

Correct Answer: Cultural differences and market acceptance

Understanding cultural differences and market acceptance is essential to ensuring the product’s success in a foreign market.

Correct Answer: Competitor analysis and market risks

Assessing competitor dynamics and market risks will help the company understand the challenges it faces in entering a highly competitive industry.

Correct Answer: Economic stability and currency risk

Economic stability and currency risk can have a significant impact on the joint venture's profitability, making them critical to assess.

Correct Answer: Identify and assess operational risks

Identifying and assessing operational risks is the foundation of a risk management plan, helping to develop effective mitigation strategies.

Correct Answer: Financial health and credit risk of the target company

Evaluating the financial health and credit risk of the acquisition target is crucial to understanding the potential risks involved in the deal.

Correct Answer: Operational risks and technology failure

Assessing operational risks and potential technology failures will help the company understand and mitigate the risks of automation.

Correct Answer: Conduct a cybersecurity risk assessment

Conducting a cybersecurity risk assessment is the first step in identifying vulnerabilities and developing a plan to address cyber threats.

Correct Answer: Data privacy and cybersecurity risks

Ensuring that data privacy and cybersecurity risks are assessed is critical when expanding online services, as these can significantly impact business operations.

Correct Answer: Regulatory compliance and legal risks

Regulatory compliance and legal risks are critical in highly regulated markets, as failure to comply can result in severe penalties and operational disruptions.

Correct Answer: Identify financial risks and vulnerabilities

Identifying financial risks and vulnerabilities is essential to building a framework that effectively mitigates these risks.

Correct Answer: Evaluate potential outcomes under different risk scenarios

Scenario analysis helps the company prepare for a range of potential disruptions, allowing for better planning and mitigation.

Correct Answer: Political risk and regulatory uncertainty

Political instability and regulatory uncertainty can significantly impact the company’s operations, making them a priority in the risk management plan.

Correct Answer: Market demand and competition risks

Assessing market demand and competition risks is critical in understanding the potential success of the product in a saturated market.

Correct Answer: Credit risk and debt levels of the target company

Evaluating the credit risk and debt levels of the target company is crucial in assessing the financial viability of the merger.

Correct Answer: Return on investment and potential financial risks

Assessing the potential return on investment and financial risks is essential for projects involving significant capital investment.

Correct Answer: Disaster recovery and business continuity planning

Preparing for natural disasters through effective disaster recovery and continuity planning is critical to minimizing the impact on operations.

Correct Answer: Cybersecurity and system downtime risks

Cybersecurity and system downtime are significant risks associated with new IT systems, requiring careful assessment and mitigation.

Correct Answer: Identify potential reputational risks

Identifying reputational risks is the first step in understanding the potential impact on the company’s image and taking action to mitigate these risks.