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CISI – Managing Operational Risk in Financial Institutions – Joshua – Quiz 5
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Question 1 of 10
1. Question
Which of the options below define financial risk?
Correct
Financial risk is a term that can apply to businesses, government entities, the financial market as a whole, and the individual. This risk is the danger or possibility that shareholders, investors, or other financial stakeholders will lose money.
Incorrect
Financial risk is a term that can apply to businesses, government entities, the financial market as a whole, and the individual. This risk is the danger or possibility that shareholders, investors, or other financial stakeholders will lose money.
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Question 2 of 10
2. Question
The following tools are used by investment professionals to analyze the risks associated with long-term investments except
Correct
The most common methods that investment professionals use to analyze risks associated with long-term investments—or the stock market as a whole—include fundamental analysis, technical analysis, and quantitative analysis.
Incorrect
The most common methods that investment professionals use to analyze risks associated with long-term investments—or the stock market as a whole—include fundamental analysis, technical analysis, and quantitative analysis.
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Question 3 of 10
3. Question
How is Fundamental analysis used to control financial risk?
Correct
Fundamental analysis is the process of measuring a security’s intrinsic value by evaluating all aspects of the underlying business including the firm’s assets and its earnings.
Incorrect
Fundamental analysis is the process of measuring a security’s intrinsic value by evaluating all aspects of the underlying business including the firm’s assets and its earnings.
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Question 4 of 10
4. Question
What are the advantages of financial risk? (Select all that applies)
Correct
The advantages of financial risk are
⦁ Encourages more informed decisions
⦁ Helps assess value (the risk-reward ratio)
⦁ Can be identified using analysis toolsIncorrect
The advantages of financial risk are
⦁ Encourages more informed decisions
⦁ Helps assess value (the risk-reward ratio)
⦁ Can be identified using analysis tools -
Question 5 of 10
5. Question
The following are the disadvantages of financial risk except
Correct
The disadvantages of financial risk are
⦁ Can arise from uncontrollable or unpredictable outside forces
⦁ Risks can be difficult to overcome
⦁ Ability to spread and affect entire sectors or marketsIncorrect
The disadvantages of financial risk are
⦁ Can arise from uncontrollable or unpredictable outside forces
⦁ Risks can be difficult to overcome
⦁ Ability to spread and affect entire sectors or markets -
Question 6 of 10
6. Question
Fixed income is a type of security that pays investors fixed interest payments until its maturity date. Which of the following is not a fixed income product? (Select all that applies)
Correct
The types of fixed-income securities are:
a. Treasury bills (T-bill)
b. Corporate bonds
c. Fixed-income mutual fundsIncorrect
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Question 7 of 10
7. Question
As the newly appointed Enterprise Risk Manager, which of the following ways will you employ to help reduce safety risks for your organization’s activities and events?
Correct
Properly planning of the events and activities would help to reduce incidences of safety risk in an organisation.
Incorrect
Properly planning of the events and activities would help to reduce incidences of safety risk in an organisation.
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Question 8 of 10
8. Question
What is a key principle behind risk management programs in any organisation?
Correct
The key principle behind risk management programs in any organisation is Security controls should be protected through the obscurity of their mechanisms
Incorrect
The key principle behind risk management programs in any organisation is Security controls should be protected through the obscurity of their mechanisms
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Question 9 of 10
9. Question
Your company has suffered several serious data losses when mobile devices were stolen. The risk manager has decided to implement full disk encryption on all mobile devices. What risk response has he taken?
Correct
By implementing full disk encryption on all mobile devices, the risk manager has the reduced the risk of vital company information getting into the wrong hands
Incorrect
By implementing full disk encryption on all mobile devices, the risk manager has the reduced the risk of vital company information getting into the wrong hands
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Question 10 of 10
10. Question
Which of the following statements defines pure risk? (Select all that applies)
Correct
Pure risk is a type of risk that cannot be controlled and has two outcomes: complete loss or no loss at all. There are no opportunities for gain or profit when pure risk is involved. Pure risk is generally prevalent in situations such as natural disasters, fires, or death.
Incorrect
Pure risk is a type of risk that cannot be controlled and has two outcomes: complete loss or no loss at all. There are no opportunities for gain or profit when pure risk is involved. Pure risk is generally prevalent in situations such as natural disasters, fires, or death.