Risk Assessment & Mitigation Flashcards
7 cards from real CAM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Assessment & Mitigation flashcards as text
A key account manager discovers that a top client generates 40% of total revenue. Which risk category does this situation primarily represent?
Answer: Concentration risk
Concentration risk arises when a disproportionate share of revenue depends on a single client, partner, or segment.
Which risk mitigation strategy involves transferring potential financial loss to a third party through contractual arrangements?
Answer: Risk transfer
Risk transfer shifts the financial burden of a potential loss to another party, such as through insurance or indemnity clauses.
A client's payment history shows increasingly delayed invoices over three months. What is the MOST appropriate first action for the account manager?
Answer: Conduct a proactive credit risk review and open a dialogue with the client
A proactive credit risk review combined with open client dialogue allows early intervention before the situation escalates to default.
In risk management, what does a 'risk register' primarily serve to document?
Answer: Identified risks, their likelihood, impact, and assigned owners
A risk register is a centralized log that captures each identified risk along with its probability, potential impact, mitigation plan, and responsible owner.
Which of the following BEST describes 'residual risk' in account management?
Answer: Risk that remains after mitigation controls have been applied
Residual risk is the level of risk that persists even after all planned mitigation measures have been implemented.
A client operating in a heavily regulated industry undergoes a sudden regulatory change. Which risk type does this scenario illustrate?
Answer: Regulatory/compliance risk
Regulatory or compliance risk arises when new laws, rules, or standards affect a client's operations and, by extension, the account relationship.
When performing a risk impact assessment, what two dimensions are typically plotted on a risk matrix?
Answer: Likelihood and impact severity
A risk matrix plots the probability (likelihood) of a risk occurring against the severity of its impact to prioritize mitigation efforts.