ARM Strategic Risk Management Flashcards
6 cards from real ARM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 ARM Strategic Risk Management flashcards as text
What is the primary purpose of integrating risk management into strategic planning?
Answer: To align risk-taking with organizational objectives
Integrating risk management into strategic planning ensures risk-taking activities support and align with the organization's stated objectives.
Risk appetite in strategic risk management is best defined as:
Answer: The amount and type of risk an organization is willing to accept pursuing its objectives
Risk appetite represents the level and type of risk an organization willingly accepts in pursuit of its strategic goals.
Which analysis tool assesses an organization's internal strengths and weaknesses alongside external opportunities and threats?
Answer: SWOT analysis
SWOT analysis evaluates internal Strengths and Weaknesses and external Opportunities and Threats to inform strategic risk decisions.
A key distinction between strategic risk and operational risk is that strategic risk:
Answer: Can threaten the entire business model or competitive position
Strategic risks are broader in scope and can jeopardize an organization's fundamental competitive position, not just individual operations.
What does a risk matrix primarily help risk managers visualize?
Answer: The relationship between risk likelihood and potential impact
A risk matrix plots risks by probability of occurrence against severity of impact to prioritize management attention.
In strategic risk management, 'risk tolerance' refers to:
Answer: The acceptable variation in outcomes relative to stated objectives
Risk tolerance defines the acceptable deviation from expected outcomes that an organization will accept while still pursuing its objectives.