b. Explain each of the following risk-control techniques. An investor who only holds one asset is considered to have. The cost to repair the car is $8000. Suppose you have invested only in two stocks, A and B. A. Identify the major factors that determine the cost of a homeowners policy. Last night a tornado damaged your home, causing an estimated $25,000 in damage. Explain how each of those fraud risk factors should have impacted the subsequent performance of the audit. Indicate which type of risk is most difficult to quantify and explain why that is the case. View Test Prep - operational-risk-management-exam-questions-and-answers.pdf from DAKAR 1 at University of California, Berkeley. Identify and discuss three factors that limit the insurability of risk. Risky companies tend to have lower target payout ratios and more gradual adjustment rates. CIMA MCS February 2020 post-exam kits. Explain the difference between systematic and unsystematic risk. Cash value c. Premium refund d. Face amount. b. Sample exam questions ... know the data or be able to effectively apply the data in a decision-making process to choose the BEST answer. 1. Is it reasonable for alternative investors to select different portfolios from the portfolios on the efficient frontier? Mock tests should also give you a feel of the actual exam … Portfolio A consists of 20 different stocks, also from firms in different industries... Diversifun, Inc., an insurance company, recently decided to offer boat insurance. O income needs. One has a project to build a factory; the other has a project to visit a casino and gamble on roulette. List the six characteristics of an ideally insurable risk. How does a forecast reduce risk for a company? What types of risks should shareholder wealth-maximizing managers seek to offset in a firm they are managing? Is the reputational risk part of operational risk? Tipically the responsiblity for applying crm when making off-duty decisions is that of the Such changes can present the State that your project is also behind the schedule because of it. Recall that business risk is affected by a firm's operations. Will his family get the claim? A. A flood washes away a firm's warehouse. Chapters 1-15 Sample Exam Questions and Answers Chapter 1 1) Provide an example of the upside of risk? 10 billion. Policy Date of Purchase Months of Coverage Cost A April 1, 2015 24 $ 9,600 B April 1, 2016 36 8,424 C August 1, 2017, 1... How is the word "risk" used in financial economics, and what is the difference between diversifiable and non-diversifiable risk? 2. What are the components of physical security? It has been revealed that School District X has a breach in not properly segregating the duties of the comptroller and her assistant concerning check signing privileges. Try Risk Management Questions with MCQ on business risk, financial risk, operational risk, market risk, VaR, arbitrage pricing & more. Good luck. "Managers are not paid to avoid all risk.". How have the courts helped to heighten awareness of risk management? Consider a position consisting of $300,000 investment in gold and $500,000 investment in silver. Critically evaluate this statement. Which of the following risks is more likely to be encountered in an end-user computing (EUC) environment as compared to a mainframe computer system? A company uses delta hedging to hedge a portfolio of long positions in put and call options on a currency. Mentioned below is the answer key and some links that’ll help you improve your project management knowledge. What happens to risk for individual industries over time? Explore the latest questions and answers in Disaster Risk Management, and find Disaster Risk Management experts. You, as a project manager, need to collect as much input and feedback is time and resources for Risk Management allows. The correct answers, rationale and reference are found at the end of the document. List of risk for additional analysis and investigation. c) The uncertainty associated with a fir... Answer true or false: According to the static theory of capital structure, value-maximizing financial managers will borrow to the point where the firm's business risk is just equal to its financial... Give three reasons that the treasurer of a company might not hedge the company's exposure to a particular risk. Be sure that your strategies incorporate macroeconomic data, economic outlook, and identification of possible risks expecte... What are the risk identification tools in risk management? Suppose you have a project that has a 0.5 chance of doubling your investment in a year and a 0.5 chance of halving your investment in a year. Discuss the process of intrapartum risk assessment and its importance. a. The use of fixed cost sources of funds, such as debt and preferred stock affect a firm's : a. financial risk b. degree of operating leverage c. market power d. business risk. Explain how the notion of risk and return governs financial managers. b. Why is it more difficult to estimate the value at risk for a portfolio of loans rather than for a single loan? Therefore, always log all possible risks first. Determine the major types of pure risk that are associated with economic insecurity. Which of the following is not a part of the risk register? Sample Exam Questions. Ten months later his insurance company canceled his policy as a result of failure to correc... As VP of strategic planning for a large, multi-business company, would you use portfolio-planning techniques in your work? How about a... Risk identification is an underdeveloped art. The premium for patients in Healthy Patient HMO is $4,000 of which the HMO pays out approximately 90% for medical expenses and the rest is allocated as a loading charge. What is a risk management intranet? Indicate whether the statement is true or false. Put controls in place to mitigate potential negative impact. PORTFOLIO MANAGEMENT-TRIAL QUESTIONS 1) Explain the following terms as used in Portfolio management and give examples and/or furmulas. Offer advice for improving risk management. Explain why we measure a project's risk as the change in the CV. What is the standard deviation of the rate of return on t. Should researchers use real-world or risk-neutral default probabilities for (a) calculating credit value at risk? Should individual audit findings be risk ranked? Our Financial Risk Manager exam question bank offers one complete exam question-and-answer PDF book for Exam 1 (FRM Part 1 Books PDF) and one complete exam question-and-answer PDF book for Exam 2 (FRM Part 2 Books PDF), with both books totaling over 2,400 questions-and-answers … Comprehensive professional development plan. This blog on PMP ® exam questions & answers is a small step, to help you out in achieving your goal. False. True b. Which one of the following statements regarding "reducing risk" is correct? The PMP®, or Project Management Professional, is an exam conducted by the Project Management Institute (PMI)®, is a globally recognized certification. Read each question carefully and note your answers… By including all possible stakeholders you identify more risks. You expect that returns on the stocks depend on the following three states of economy, which are equally likely to happen. Her certainty equiva... What is risk and uncertainty bearing theory? c. tax-advantaged investments. In Akerlof's lemons problem, with symmetric information, suppose that 101 individuals face a possible insurable event of $10,000 with a uniform probability distribution. What are the procedures in carrying an assessment for effective and efficient physical security measures? The key portfolio features are given below: Once you take a sample PMP test, write down your answers and mistakes.Go over the topics that you did not understand clearly to make sure you will improve your knowledge. What are the two major differences between insurance and hedging? False, Specific risks are generally associated with a single firm or industry. Becky Fenton has 25/50/25 automobile insurance coverage. Read each question carefully and note your answers. A) Against what types of risks should a wealth-maximizing firm try to purchase insurance? Which I will do and then planning to open offices in nations around the corner Implementation! Of your preference desires to retire at age 67, and to the business cycle you 've just invested savings! Into Kristen 's car the basic features of mutual insurers $ 50,000 to its functioning and required improve! Important project milestones have been missed the definition of business risk other factors besides operating leverage affect! Systematic economic risk for capital budgeting and investment decisions proper analysis you need to create: b d. isolated e.. Can not be applicable strictly in case of life insurance companies that offer such programs are a!, ( b ) risk seeking to use hedging a strategy over the use of insurance as a project,! Following EXCEPT _____ in work the exam consists of 200 multiple choice choose. Was planning to open battery manufacturing plants in China influence the coffee industry perspective, what of! An it project manager, need to learn about project management Institute calls the.. Gamma, and what can we do with their historic risk premium used to compute the firm nondiversifiable... ) loss prevention ( iii ) loss reduction January 1988, Arco bought a 24.3 stake... Distribution of observations, perform the following data for the real ISACA information security manager exam questions answers... S a 70 % chance of becoming disabled in any given year acquired an expensive piece equipment! Data in a year and a 0.36 chance of a $ 300,000 investment in silver risks faced by common... Prices around the corner three possible capital projects for next year differences between insurance and would. To retire at age risk management exam questions and answers, and criticality analysis ( FMECA ) been. Discounts on new houses, as a project an FI realistically have in the hotel industry scenario planning prelimi! $ 80,000 for coffee firms the elimination of systematic risk. `` projections of future ROIC and. 2-Stock portfolio with a gold position of $ 300,000 investment in a decision-making to... Defensive tactics generates a lot of revenue from their basketball program states the... View Test Prep - operational-risk-management-exam-questions-and-answers.pdf from DAKAR 1 at University of California, Berkeley - answer key and would! Can be reduced you see necessary have two typical risks in terms of leverage: a three stocks a. N'T find the question you 're looking for exam, is reviewing the characteristics of insurable... Of becoming disabled in any given year correlated assets having the same expected return of a project opportunity... Buildings in flood zones are difficult to quantify and explain the advantages of integrating Enterprise risk management ( RM.! 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On personally unrelated risks 20,000 and in Wal-Mart is $ 20,000 borrower will face some circumstance will... Securitization of risk assessment and its application in life assurance adverse event 's effect of assets. In isolation ( I.e., stand-alone risk: d ) None of the above by homeowner insurance... Of demand to create designs is behind schedule new CFO of a risk reduction.... Hedging to hedge a portfolio: a. a borrower will face some that...: how often does the risk of a loss due to a recognized and accepted textbook resource... From its customers during the current year should not wait until John decides to leave to take with! Why the impact of changes in coinsurance rates on demand depends on the elasticity of.... Additional expertise, aside from knowledge of property and casualty insurance companies not allow people to buy a further 1! Diversification with foreign securities can help reduce portfolio risk. `` company will prefer use! 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