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 global client informs their account manager that political instability in a key operating country may disrupt their supply chain. This is an example of:
Answer: Geopolitical risk
Geopolitical risk refers to potential disruptions caused by political events, instability, or policy changes in specific regions.
Which mitigation technique involves spreading account exposure across multiple industries, geographies, or client segments?
Answer: Diversification
Diversification reduces concentration risk by ensuring no single factor—industry, geography, or client—dominates the portfolio.
An account manager is asked to accept a new contract clause that limits liability to 10% of annual contract value. What risk consideration is MOST relevant?
Answer: Whether the cap adequately covers potential losses from service failures
Liability caps must be evaluated against the potential financial exposure from service failures to ensure the limit is commercially acceptable.
In the context of account risk, what is 'churn risk'?
Answer: The probability that a client will discontinue the relationship or switch to a competitor
Churn risk measures the likelihood that a client will end their contract or reduce engagement, directly impacting recurring revenue.
A client has recently been acquired by a competitor of your company. Which risk response strategy is MOST appropriate?
Answer: Conduct a strategic risk review and escalate to senior leadership for relationship guidance
An acquisition by a competitor creates significant relationship and conflict-of-interest risk that requires senior leadership involvement and a strategic reassessment.
Which leading indicator is MOST useful for early detection of deteriorating account health?
Answer: Declining product usage metrics and reduced stakeholder engagement
Declining usage and reduced engagement are early warning signals that a client's commitment is weakening before it shows up in renewal metrics.
What is the PRIMARY purpose of a Business Impact Analysis (BIA) in account risk management?
Answer: To identify critical account functions and quantify the impact of disruptions on business continuity
A BIA identifies which account-related functions are critical and estimates the financial and operational consequences of their disruption.