Business Case Writing Risk Assessment and Mitigation 2

Question 1

Which risk is described as an unknown risk that cannot be identified in advance?

Accepted Answer

Unknown-unknown

Answer

Unknown-unknowns are risks that cannot be anticipated because they fall outside current knowledge or experience.

Question 2

A business case should include a risk-adjusted NPV because:

Accepted Answer

It reflects the impact of uncertainty on expected financial outcomes

Answer

Risk-adjusting the NPV by using higher discount rates or probability-weighting scenarios gives decision-makers a more realistic financial picture.

Question 3

In business case writing, a 'risk trigger' is:

Accepted Answer

An event or condition that signals a risk is about to occur

Answer

Risk triggers are warning indicators that alert the team to take pre-planned mitigation actions before or as a risk materializes.

Question 4

Which mitigation strategy is most appropriate for a high-probability, high-impact risk?

Accepted Answer

Risk avoidance or aggressive risk reduction

Answer

High-probability, high-impact risks warrant the strongest response — either eliminating the risk source or taking aggressive steps to reduce its likelihood and impact.

Question 5

In a business case, 'risk appetite' refers to:

Accepted Answer

The amount and type of risk an organization is willing to accept in pursuit of its objectives

Answer

Risk appetite defines the boundaries within which an organization is comfortable operating and should be explicitly stated in the business case risk section.

Business Case Writing Practice Test

Business Case Writing Practice Test

Business Case Writing Risk Assessment and Mitigation 2