Tag: KS3

Process risk, people risk, and event risk are all forms of?

Select ONE answer:

1. Operational risk
2. Financial risk
3. Business risk
4. Strategy risk

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct == > These risks are to do with the operations of the business – a process going wrong, a valued employee leaving, a regulation being broken.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Alex plc has analysed a particular risk faced by its Stafford division on a risk map.

It has concluded that the matter that was analysed has a low impact on the business but there is a high probability of its occurrence.

Which of the following risk responses by Alex plc would be most appropriate?

Select ONE answer:

1. Risk avoidance
2. Risk reduction
3. Risk transfer
4. Risk acceptance

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct == > Where a risk falls into the low impact, high probability quadrant of the risk map the most appropriate response is risk reduction, focusing on reducing the likelihood of the adverse event occurring.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which of the following sequences represents the order in which an organisation should respond to risk?

Select ONE answer:

1. Reduction, avoidance, sharing (or transfer), acceptance (or retention)
2. Avoidance, reduction, sharing (or transfer), acceptance (or retention)
3. Reduction, sharing (or transfer), avoidance, acceptance (or retention)
4. Avoidance, sharing (or transfer), reduction, acceptance (or retention)

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct == > First the company should see if the risk can be avoided; if not, it should try to reduce it; having reduced it as far as is feasible, it should explore the possibilities for sharing the risk (e.g. using insurance). Finally, it must accept the remaining risk.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

A particular project called the Staffie will yield either a profit of £100,000 or a loss of £50,000.

The profit will arise with a probability of 0.8 and the loss will arise with a probability of 0.2.

The project contains?

Select ONE answer:

1. Uncertainty only
2. Risk only
3. Both uncertainty and risk
4. Neither risk nor uncertainty

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct == > All the outcomes and the probability of them occurring are known. As a result, there is no uncertainty, only risk.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Lucy is a risk manager working for Alex Ltd.

At the present time Lucy is investigating the potential gross risk arising from a recent decision to incorporate lower quality materials into the production process for one of the company’s key products, the Staffordshire.

In assessing potential gross risk, Lucy needs to take account of one of the following?

Select ONE answer:

1. Level of exposure and probability of occurrence
2. Potential loss and probability of occurrence
3. Potential loss and level of volatility
4. Level of exposure and level of volatility

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct == > Gross risk is a function of the loss or impact and its probability, before any control measures are implemented.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.