Risk and Procedures for Control Paper 15

1

The phrase “self insurance” is often used to mean the same thing as






2

A landlord owns an office building in the floodplain of the Mississippi River. The landlord has decided to sell the building to a group of investors. The landlord has adopted a risk strategy of






3

All of the following are potential benefits of risk management except






4

Which one of the following is not considered a key step in the risk management process?






5

A firm can mitigate the risk of financial loss from the possible on-the-job injury of one of its employees through






6

A farmers’ cooperative has a large amount of grain that it has gathered from its members and has stored in silos Prices for grain are high but none of the cooperative’s customers is prepared to purchase any for the next 3 months. In order to hedge against an unfavorable change in grain prices over the next 3 months, the cooperative will employ a financial risk management technique known as a






7

Which one of the following calculations does not employ statistical techniques such as the normal distribution?






8

Which one of the following is not a key component of the COSO Framework for enterprise risk management?






9

Virtucon Company identifies supply chain risks as part of its enterprise risk management (ERM) process. After identification of this risk, Virtucon wants to determine how much of an impact this risk could have on its objectives. Its risk assessment should focus on






10

At the beginning of the year, a portfolio manager who manages a portfolio with a mean annual return of 8% and annual standard deviation of 25% wants to estimate the worst-case expected loss at an 80% confidence level. The value of the portfolio today is $5 million. Which method would the portfolio manager use to estimate the probable maximum loss that may be incurred at the end of the year?






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