D373 Marketing in the Digital Era - Set 2 - Part 1

Correct Answer: Purchasing insurance to cover potential losses

Risk transfer involves shifting the responsibility for risk to another party, such as purchasing insurance to cover financial losses.

Correct Answer: The level of risk an organization is willing to accept to achieve its objectives

Risk appetite refers to the amount of risk an organization is prepared to take in pursuit of its goals.

Correct Answer: To provide an independent assessment of the organization’s risk management practices

External audits offer an independent review of how well the organization is managing its risks.

Correct Answer: Identifying and prioritizing potential risks

Risk assessments help organizations identify and prioritize risks, allowing them to focus on managing the most critical threats.

Correct Answer: To document identified risks and track their status

A risk register is a tool used to document and monitor identified risks and their management actions.

Correct Answer: Risk mitigation

Risk mitigation focuses on taking steps to reduce the likelihood or impact of a risk event.

Correct Answer: To inform and engage stakeholders in the risk management process

Effective risk communication ensures that stakeholders are informed and involved in managing risks.

Correct Answer: Inefficiencies in internal processes

Internal risks are those that originate within the organization, such as process inefficiencies.

Correct Answer: The probability of a risk occurring and the severity of its consequences

A risk matrix evaluates risks based on their likelihood of occurring and the impact they would have.

Correct Answer: To ensure that critical business functions can continue during and after a disaster

Business continuity planning aims to ensure that essential operations can continue in the event of a disruption.

Correct Answer: An unexpected change in market demand

Strategic risks are related to decisions that impact an organization’s ability to achieve its long-term goals, such as changes in market demand.

Correct Answer: To visually represent the likelihood and impact of different risks

A heat map provides a visual representation of risks, helping organizations prioritize which risks need immediate attention.

Correct Answer: The probability that a risk will occur

Likelihood refers to how probable it is that a specific risk event will happen.

Correct Answer: By predicting possible outcomes and preparing for different risk scenarios

Scenario analysis helps organizations prepare for different potential risk events by analyzing possible outcomes.

Correct Answer: Risks are considered when making strategic decisions

Risk informed decision making involves incorporating risk assessments into the decision making process to better manage potential threats.

Correct Answer: Helping organizations take a proactive approach to managing risks

ERM provides a structured and proactive approach to managing risks, ensuring they are addressed before they become critical issues.

Correct Answer: A security breach due to outdated software

Technological risks involve risks related to the use of technology, such as data breaches or system failures.

Correct Answer: To ensure that risks are continuously monitored and managed

Regular risk reviews help organizations track and manage risks over time, ensuring that mitigation efforts remain effective.

Correct Answer: To communicate risk information to relevant stakeholders for decision-making

Risk reporting ensures that key stakeholders are informed about risks and can make decisions based on this information.

Correct Answer: An event that leads to the implementation of a risk management action

A trigger event is a specific occurrence that causes an organization to implement its risk management plans or controls.