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AIDA 182 EXAM NEW VERSION UPDATE ACTUAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) 100% PASS SOLUTION /ALREADY GRADED A+$12.99
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Risk quadrants are different from risk classifications. Risk quadrants focus on what? -
ANSWER>>The source of the risk itself and what part of the organization has managed it in the
past.
An enterprise risk management approach is categorizing risks into quadrants. What are hazard
risks? - ANSWER>>Normally managed by risk management professionals.
What are the four risks in the enterprise risk management model? - ANSWER>>Hazard,
operational, financial, and hazard.
What risk quadrant is the change of stocks or bonds values because interest rate changes in? -
ANSWER>>Financial risks.
What is true of pure and speculative risks? - ANSWER>>All businesses involve speculative risks.
What is true of diversifiable and nondiversifiable risks? - ANSWER>>Systemic risks are
nondiversifiable generally.
What is an example of a strategic risk? - ANSWER>>A new computer chip that could give a
company growth.
What is an example of an operational risk? - ANSWER>>The ability of suppliers to perform.
What is true of subjective and objective risks? - ANSWER>>Subjective risk can be present where
objective risk is not.
What is an example of a speculative risk? - ANSWER>>Investing in stock.
,What is true of diversifiable versus nondiversifiable risk? - ANSWER>>Diversifiable risks are not
correlated and can be managed through diversification or spread of risk.
A company's fleet of cars is worrying the managers liquidity of the company and fuel prices
having an adverse effect is which type of risk quadrant? - ANSWER>>Financial risk.
An employee embezzling funds from a company for not feeling adequately paid is what risk? -
ANSWER>>Both a hazard and an operational risk.
Failing to respond to changing customer demands is an example of what risk? -
ANSWER>>Strategic risk.
The fear of your home being hit by a storm and damaged or destroyed is what risk for you? -
ANSWER>>A subjective risk.
What quadrant of risk is a harmful chemical found in a building with unknown harm to residents
and to the clean up crew part of? - ANSWER>>A hazard risk.
Driving instead of flying because of feeling of safety is an example of what? - ANSWER>>A
subjective risk.
Investing money in a rental property brings what? - ANSWER>>Both speculative and pure risks.
The property values can increase or decrease and the building could burn down.
Increased competition is an example of what? - ANSWER>>A strategic risk.
Renovating a warehouse, purchasing a new order processing software, added two new delivery
trucks, and purchasing a production machine which also allows for potential for a new product
, line, are all projects. Which project is the most speculative? - ANSWER>>The new production
machine.
What is a true statement on the basic measures applying to risk management? -
ANSWER>>Consequences measure the degree to which an occurrence could positively or
negatively affect an organization.
The law of large numbers states as the number of exposure units increases, what happens? -
ANSWER>>The relative accuracy of predictions about future losses increase.
Which two measures are important in assessing risk and how to manage it? -
ANSWER>>Consequences and likelihood.
What is the measure of the biggest potential loss of an occurrence. - ANSWER>>An exposure.
Giving discounts to everyone in one segment of your book of business or a bank in the same
town as a business it gives loans to including its employees, are both examples of high
correlation. What is true about correlation? - ANSWER>>When two variables are perfectly
positively correlated, one variable increases, and the other will increase in direct proportion.
Covariance is different from correlation in that correlation represents how strongly variables are
related. Covariance is the measure of correlation. Therefore, covariance is what? -
ANSWER>>The measure of the extent to which variables move together or independently.
You own common stock of five large clothing brands. What would improve the portfolios risk
the greatest? - ANSWER>>Adding a discount retailer stock, not a smaller clothing brand.
What is true of correlation analysis? - ANSWER>>Abnormal observations and inaccurate data
may skew the analysis.
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