Risk Management Review

The two dimensions of risk are

Impact and Probability

An example of an internal financial risk is

Improper budgeting, poor training, employees

A common transference device is a(n)

Insurance Policy

Businesses are most likely to prepare contingency and fallback plans for risks that they choose to

Accept the risk

Hospitals, fire and rescue services, and police departments, which attempt to avoid risk as much as possible, are usually risk-__________ organizations.

Averse

If a business chooses not to do something that it considers risky, it is __________ the risk.

Avoiding

A good source of information about a business's retroactive risks would be a(n)

Business Incident logs

A business is most likely to mitigate a risk that is __________ to eliminate completely.

Difficult and expensive

What do risk managers need to do to help their company successfully launch a new product?

Evaluate the potential gain and losses of the launch

Technological innovations can increase strategic risk for business by

Making some products obsolete

Poor product development, unreliable manufacturing equipment, and product shortages are examples of __________ risks.

Operational

An earthquake is an example of a __________ risk.

Pure

What category of risk typically has the most impact on a business's ability to reach its goals and objectives?

Strategic Risks

The term risk is used in business to refer to the

The possibility of loss or gain

Businesses typically accept a risk's consequences if

The potential payoff is higher than the losses

Walt's World of Winter ski shop manages existing risks as appropriate, but it does not take risks on new products, new markets, or new equipment. Walt's is a risk-__________ organization.

Tolerant

An example of hazard risk would be:

Tornadoes, crime, etc.

Which of the following statements accurately explains the nature of prospective risks:

which have not happened before but could occur in the future