#1
Which of the following is NOT a primary component of risk management?
Risk celebration
ExplanationNot a recognized component; risk management focuses on identification, assessment, mitigation, and monitoring.
#2
What is the purpose of risk identification in fraternal organizations?
To evaluate potential risks and their characteristics
ExplanationCritical step to understand and analyze possible risks, aiding in their management.
#3
What is the primary goal of risk management in fraternal organizations?
To minimize the impact of potential risks
ExplanationFocuses on reducing negative effects of risks, safeguarding organizational objectives.
#4
Which of the following is a characteristic of risk tolerance?
It varies depending on the organization's objectives
ExplanationVaries according to organizational goals, influencing risk acceptance levels.
#5
Which of the following is an example of a strategic risk for a fraternal organization?
A decline in fundraising efforts
ExplanationConcerns long-term organizational objectives and sustainability.
#6
What is a risk register used for in risk management?
To document and monitor identified risks
ExplanationCentral tool for recording identified risks and tracking mitigation efforts.
#7
Which risk management technique involves transferring the risk to another party?
Risk transfer
ExplanationStrategy of shifting risk burden to another entity, often through insurance or contracts.
#8
What does the term 'risk appetite' refer to in risk management?
The willingness of an organization to take on risk
ExplanationDefines an organization's readiness to accept risk in pursuit of its objectives.
#9
What is risk mitigation?
The process of reducing or controlling risks
ExplanationInvolves actions to lessen or manage risks, minimizing their potential impact.
#10
Which of the following is NOT a step in the risk management process?
Risk avoidance
ExplanationWhile a valid strategy, it's not universally considered a distinct step in risk management.
#11
In risk management, what does the term 'mitigation' refer to?
The process of reducing risks
ExplanationEncompasses actions to lessen risk impact, enhancing resilience.
#12
Which of the following is a common technique for risk avoidance?
Not engaging in the risky activity
ExplanationStrategy of sidestepping activities carrying substantial risk.
#13
Which of the following is a key benefit of effective risk management in fraternal organizations?
Improved decision-making
ExplanationEnhances the quality of decision-making by considering and mitigating potential risks.
#14
What role does risk assessment play in risk management?
It helps in understanding the probability and impact of risks
ExplanationCritical for evaluating risks, their likelihood, and potential consequences.
#15
What is the purpose of risk communication in risk management?
To inform stakeholders about identified risks and mitigation strategies
ExplanationEnsures stakeholders are aware of risks and involved in mitigation efforts.
#16
What is the term used to describe the process of reducing the impact of a risk?
Risk mitigation
ExplanationInvolves actions to minimize the negative consequences of identified risks.
#17
What is the primary goal of risk communication in risk management?
To inform stakeholders about identified risks and mitigation strategies
ExplanationEnsures stakeholders are aware of risks and engaged in risk mitigation efforts.