IC86 RISK MANAGEMENT - 15
| Q1.Mega Industries manufactured goods which cost Rs. 50 lakhs and sold these goods to Sunshine Industries for Rs. 55 lakhs. Unfortunately, all these goods were destroyed in a fire before they could be delivered. What is the amount of loss for Mega Industries? |
| No Loss |
| Rs. 5 lakhs |
| Rs. 50 lakhs |
| Rs. 45 lakhs |
| Rs. 55 lakhs |
| Q2.What is STATIC RISK? |
| Risks associated with individuals are known as Static Risk. |
| Risks associated with changes in human wants and improvements in machinery is known as Static Risk |
| The risk arising due to price reduction or where purchase and sales constraints are involved is known as Static Risk |
| Risk which is connected with losses caused by the irregular action of the forces of nature or the mistakes and misdeeds of human beings is known as Static Risk |
| When there is an existence of a chance of loss only, but not the chance of gain at all is known as Static Risk |
| Q3.Why is STRESS TESTING applied to all divisions of a company? |
| Stress testing is done to determine the viability of each division under a risk event |
| Stress testing is done to determine the profitability of each division under a risk event |
| Stress testing is done to determine the accessibility of each division under a risk event |
| Stress testing is done to determine the performance of each division under a risk event |
| Stress testing is done to determine the liquidity of each division under a risk event |
| Q4.Identify the essential elements of a risk management program? |
| Survival and continuity of operations |
| Profitability and stability of earnings |
| Survival and continued growth |
| All of the above |
| None of the above |
| Q5.State the reason for applying stress testing to all divisions of a company? |
| To determine the accessibility of each division under a risk event |
| To determine the viability of each division under a risk event |
| To determine the liquidity of each division under a risk event |
| To determine the performance of each division under a risk event |
| To determine the profitability of each division under a risk event |
| Q6.Which of the below options is a major event which took place in 1992? |
| Basel Committee on Banking Supervision was formed |
| Bank for International Settlements (BIS) was formed |
| London Stock Exchange introduced new legislation's |
| COSO (Committee for Sponsoring Organisations) was formed |
| Basel II Accord |
| Q7.A possible alternative to the actual site visit is the completion of a checklist or some sort of questionnaire. Identify the limitation of this risk identification technique. |
| Easy to change |
| Feedback may not be on time |
| Facilitates quick comparison |
| Reasonably inexpensive |
| None of the above |
| Q8.Identify which of these is/are, not an objective of an enterprise risk management? 1. To get the highest market share 2. Have a continued growth 3. To Lower the risk management costs |
| Only 1 |
| Only 2 |
| Both 2 and 3 |
| Both 1 and 2 |
| Both 1 and 3 |
| Q9.The risk management program must also support the OPERATIONAL OBJECTIVES of the management which relate to - 1. Achieving economy of operations 2. Compliance with statutes 3. Good citizenship and Social responsibility |
| Only 1 |
| Only 2 |
| Only 2 and 3 |
| Only 1 and 2 |
| All 1,2 and 3 |
| Q10.Which of these is NOT a disadvantage of the 'Checklist' method of risk identification? 1. Checklists are filled by somebody other than the risk manager 2. Feedback may not be timely 3. Too many visits by the risk manager may make him less vigilant in the identification of risks |
| Only 1 |
| Only 2 |
| Only 3 |
| Both 1 and 2 |
| All 1, 2 and 3 |