ELB 102 Risk Management

Preliminary Examination

Name: _______________________ Prof: RYAN B. ENDRINAL

Time: 5:30-7:00 PM Date: _____________________

I. MULTIPLE CHOICE (5 PTS). Encircle the letter of the correct choice.

1. Which of the following statements is/are false?
I. Risk management is a process that helps business identify, assess and respond to threat.
II. Risk management is not only wise to assure business continuity and profitability.
a. I only c. Both I and II
b. II only d. Neither I nor II
2. What is the process of rating or scoring risk based on a person’s perception of the severity and likelihood of its
consequences?
a. Quantitative risk analysis c. Risk management
b. Qualitative risk analysis d. Risk analysis
3. What is the process of calculating risk based on data gathered?
a. Quantitative risk analysis c. Risk management
b. Qualitative risk analysis d. Risk analysis
4. Which of the following statements is/are correct?
I. Risk control is a crucial part of the risk management process.
II. Risk control is a business strategy that allows organizations to evaluate potential losses and take action to reduce or
eliminate those risks.
a. I only c. Both I and II
b. II only d. Neither I nor II
5. What do you called that takes steps to reduce the negative effects of threats and disasters on business continuity
(BC)?
a. Risk control c. Risk mitigation
b. Risk reduction d. Risk management

II. IDENTIFICATION (10 PTS). Read each statement and identify what is being described. Write your answer on
the space provided to complete the statement.
___________ 6. It is the process of identifying, assessing and controlling threats to an organization's capital and
earnings.
___________ 7. It brings the possibility of loss, no change, or gain.
___________ 8. It involves the identification, analysis, and management of risk factors in industrial and organizational
psychology.
___________ 9.Circumstances that hampers the business ability to extend the promised results to the stakeholders.
___________ 10. It is a consequence of uncertainty; risk can be emotional, financial, or reputational.
___________ 11.It refers to anything that could impact your company's finances.
___________ 12. It refers to the internal and external events that may make it difficult, or even impossible, for an
organisation to achieve their objectives and strategic goals.
___________ 13. It is defined as the risk of incurring losses resulting from the inability to meet payment obligations in
a timely manner when they become due or from being unable to do so at a sustainable cost.
___________ 14. It refers to any unforeseen or unexpected occurrence that can cause losses for investors or other
stakeholders in a company or investment.
___________ 15. It is the risk of loss resulting from ineffective or failed internal processes, people, systems, or
external events that can disrupt the flow of business operations.
 ___________ 16. It is the possibility of a loss resulting from a borrower's failure to repay a loan or
meet contractual obligations.
___________ 17. It is the risk that arises from movements in stock prices, interest rates, exchange rates, and
commodity prices.
___________ 18. It is a strategy to prepare for and lessen the effects of threats faced by a business.
___________ 19. It can be defined as the classification of risks as per the business activities of the organization and
provides a structured overview of the underlying and potential risks faced by them.
___________ 20. It aims to identify, assess, and prepare a company for any threats that may interfere with corporate
operations or the organization’s ability to pursue financial goals and other objectives.

III. ENUMERATION (15 PTS)

Common categories of risk
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Classification of Risk
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IV. ESSAY (20 PTS)

31-40. Differentiate qualitative and quantitative risk analysis.

41-50. What is risk management? Explain briefly.