The Realest Study Materials ISO-31000-CLA Dumps Updated May 30, 2023
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NEW QUESTION # 45
The Chief Risk Officer chairs the ERM/RM steering committee.
- A. True
- B. False
Answer: A
Explanation:
Explanation
The Chief Risk Officer chairs the ERM/RM steering committee. The ERM/RM steering committee oversees the organization's risk management activities and provides guidance and support to senior management.
NEW QUESTION # 46
Which of the following is described in terms of consequence and likelihood?
- A. Level of uncertainty
- B. Level of cohesiveness
- C. Level of crisis
- D. Level of risk
Answer: D
Explanation:
Explanation
Level of risk is described in terms of consequence and likelihood. Consequence means the outcome or impact of a risk event on objectives. Likelihood means how probable it is that a risk event will occur.
NEW QUESTION # 47
From the three actions Tom Brown is undertaking, which is categorised as a pure risk?
- A. Going horse riding without wearing a riding helmet.
- B. Selling his house even though he receives less than he paid for it because he thinks prices will fall further.
- C. Buying 100 lottery tickets
Answer: A
Explanation:
Explanation
According to 1, page 9, pure risk is "a situation where there are only two possible outcomes: loss or no loss".
Buying lottery tickets and selling a house are examples of speculative risk, where there is a possibility of gain or loss. Going horse riding without a helmet is an example of pure risk, where there is only a possibility of loss (injury) or no loss.
NEW QUESTION # 48
When defining the success measures for the organization's risk strategy, the risk management professional will include which of the following steps?
- A. The development of timelines for implementing the risk strategy
- B. A review of the goals and objectives of the risk strategy
- C. A selection of appropriate media for communicating the risk strategy
- D. An analysis of the organization's total cost of insurable risk
Answer: B
Explanation:
Explanation
A review of the goals and objectives of the risk strategy is part of defining the success measures for the organization's risk strategy1. This helps to ensure that the risk strategy aligns with the organization's purpose, vision, mission and values.
NEW QUESTION # 49
Which two of the following are types Integrated Processes? (Choose two)
- A. People processes
- B. Hard process
- C. Quality analysis
- D. Soft processes
Answer: A,B
Explanation:
Explanation
People processes and hard processes are two types of integrated processes3. People processes involve human factors such as culture, values, ethics, and behavior that influence risk management. Hard processes involve technical aspects such as methods, tools, techniques, and systems that support risk management.
NEW QUESTION # 50
Who serves as the principal adviser to the CEO, business unit heads, and critical function heads on risk matter?
- A. Risk Owner (RO)
- B. Quality Auditor (QA)
- C. Chief Risk Officer (CRO)
- D. Chief Information Officer (CIO)
Answer: C
Explanation:
Explanation
Chief Risk Officer (CRO) serves as the principal adviser to the CEO, business unit heads, and critical function heads on risk matter. CRO leads the development and implementation of the organization's risk management framework and process.
NEW QUESTION # 51
A train has crashed and is badly damaged. There have been numerous claims from injured passengers as well as a loss of revenue for the train operator. This is an example of
- A. risk categorisation.
- B. risk severity.
- C. risk probability.
- D. risk aggregation.
Answer: D
Explanation:
Explanation
A train crash and its consequences is an example of risk aggregation, which is the combined effect of multiple risks on an organisation's objectives3. Risk aggregation can result in losses that are greater than the sum of individual losses.
NEW QUESTION # 52
Which of the following is a process with inputs, activities, and outcomes?
- A. Supply chain management
- B. Risk management
- C. Financial management
- D. Quality management
Answer: B
Explanation:
Explanation
Risk management is a process with inputs, activities, and outcomes1. The inputs are the organization's context and risk criteria. The activities are risk identification, analysis, evaluation, and treatment. The outcomes are improved decision making, performance, and resilience.
NEW QUESTION # 53
Which management can be used in varied and complex settings?
- A. Quality
- B. Risk
- C. Safety
- D. Crisis
Answer: B
Explanation:
Explanation
Risk management can be used in varied and complex settings . Risk management can help organizations deal with uncertainty and complexity in any type of activity, industry, or sector.
NEW QUESTION # 54
Which of the following is considered a risk analysis technique?
- A. Monte Carlo simulation
- B. Consensus building
- C. Insurance placement
- D. Budget allocation
Answer: A
Explanation:
Explanation
Monte Carlo simulation is a risk analysis technique that uses random variables to model uncertainty and generate possible outcomes2. This helps to assess the probability and impact of different scenarios.
NEW QUESTION # 55
Records and reports provide a continuing account of the risk management system.
- A. True
- B. False
Answer: A
Explanation:
Explanation
Records and reports provide a continuing account of the risk management system2. They help to monitor and review the performance and effectiveness of risk management.
NEW QUESTION # 56
What is a primary benefit of a commercial customer self-insuring a risk?
- A. Claims costs will reduce
- B. Staff training requirements will decrease.
- C. Controllability of risk will increase
- D. Its short-term cash-flow position is likely to improve.
Answer: D
Explanation:
Explanation
A primary benefit of a commercial customer self-insuring a risk is that its short-term cash-flow position is likely to improve. This is because self-insurance reduces or eliminates insurance premiums and administrative costs associated with external insurers.
NEW QUESTION # 57
Which step is the last part of the risk assessment process, which started with risk identification then moved to risk assessment, and finally risk evaluation?
- A. Risk avoidance
- B. Risk acceptance
- C. Risk evaluation
- D. Risk outsourcing
Answer: C
Explanation:
Explanation
the last step of the risk assessment process, which starts with risk identification, moves to risk assessment, and finally risk evaluation, is Risk evaluation.
Risk evaluation involves comparing the estimated level of risk against the risk criteria established during the risk assessment phase, to determine the significance of the risk and whether it is acceptable or not. This decision is made in consultation with stakeholders, who may provide additional context and information to inform the decision.
The American Society for Quality (ASQ) describes risk evaluation as "the process of comparing an estimated risk against given risk criteria to determine the acceptability of the risk." [1] Similarly, ISO/IEC 27001:2013 (Information technology - Security techniques - Information security management systems - Requirements) defines risk evaluation as "the process of comparing the estimated risk against given risk criteria in order to determine the significance of the risk." [2] References: [1] ASQ Glossary - Risk evaluation, https://asq.org/quality-resources/risk-evaluation [2] ISO/IEC
27001:2013, Clause 6.1.3(c), https://www.iso.org/standard/54534.html
NEW QUESTION # 58
A large manufacturing organisation has renewed an insurance policy and has accepted a significant increase in the policy deductible. What is this most likely to indicate?
- A. Decreased risk tolerance.
- B. Decreased risk avoidance.
- C. Increased risk retention.
- D. Increased risk elimination.
Answer: C
Explanation:
Explanation
A large manufacturing organisation has renewed an insurance policy and has accepted a significant increase in the policy deductible. This is most likely to indicate increased risk retention, which means accepting more responsibility for potential losses5. This could be done to reduce insurance premiums or increase control over claims.
NEW QUESTION # 59
Which of the following documents information are relevant to the organization's risk management framework, process, and system?
- A. Recording and reporting
- B. Visualizing and conceptualizing
- C. Reporting and auditing
- D. Rationalizing and reporting
Answer: A
Explanation:
Explanation
Recording and reporting documents information that are relevant to the organization's riskmanagement framework, process, and system2. These activities help to provide evidence, feedback, learning, and improvement for risk management.
NEW QUESTION # 60
ISO uses the concept of uncertainty as the driver and rationale for risk management.
- A. True
- B. False
Answer: A
Explanation:
Explanation
ISO uses the concept of uncertainty as the driver and rationale for risk management. Uncertainty refers to the state of having incomplete knowledge or understanding about something that can affect an organization's objectives.
NEW QUESTION # 61
How does a pure risk differ from a speculative risk?
- A. A pure risk always has an environmental cause whereas a speculative risk always involves human error.
- B. A pure risk only leads to the possibility of a loss, whereas a speculative risk may lead to a gain.
- C. A pure risk can be measured in probability terms whereas a speculative risk cannot.
- D. A pure risk is not subject to regulatory control but a speculative risk always is.
Answer: B
Explanation:
Explanation
A pure risk only leads to the possibility of a loss, whereas a speculative risk may lead to a gain12. For example, entering into a contract to purchase a new factory is a speculative risk, as it could result in either profit or loss depending on market conditions.
NEW QUESTION # 62
Risk management theory that considers an organization-wide approach to risk management is known as what type of approach?
- A. Comprehensive
- B. Holistic
- C. Interrelational
- D. Cross-functional
Answer: B
Explanation:
Explanation
According to , page 4, a holistic approach to risk management is "one that considers all sources and types of risks across all organizational units and activities". It aims to integrate governance, strategy, performance, culture and ethics into a coherent framework for managing uncertainty 2.
NEW QUESTION # 63
Which of the following are measured extensively throughout the organization and into the supply chain?
- A. CMP's and CAD's
- B. KPI's and KRI's
- C. PDA's and PBA's
- D. API's and SKD's
Answer: B
Explanation:
Explanation
KPIs (Key Performance Indicators) and KRIs (Key Risk Indicators) are measured extensively throughout the organization and into the supply chain1. These indicators help to monitor and evaluate the performance and effectiveness of risk management.
NEW QUESTION # 64
Which of the is a set of systematic, deliberate, and actionable steps to manage risk?
- A. Security
- B. Vision
- C. Process
- D. Control
Answer: D
Explanation:
Explanation
Control is not a set of systematic, deliberate, and actionable steps to manage risk, but rather a measure or action that modifies risk1. Process is a set of systematic, deliberate, and actionable steps to manage risk2.
Process involves establishing context, identifying risks, analyzing risks, evaluating risks, and treating risks.
NEW QUESTION # 65
Which of the following is a process with inputs, activities, and outcomes?
- A. Supply chain management
- B. Risk management
- C. Financial management
- D. Quality management
Answer: B
Explanation:
Explanation
Risk management is a process with inputs, activities, and outcomes1. The inputs are the organization's context and risk criteria. The activities are risk identification, analysis, evaluation, and treatment. The outcomes are improved decision making, performance, and resilience.
NEW QUESTION # 66
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