CPS Risk Management & Mitigation 2

Question 1

In risk management, what does a 'risk register' primarily serve to document?

Accepted Answer

Identified risks, their likelihood, impact, and mitigation plans

Answer

A risk register is a formal record of identified risks along with their assessed likelihood, potential impact, owners, and planned mitigation or response actions.

Question 2

Which risk response strategy involves shifting the financial impact of a risk to a third party?

Accepted Answer

Transfer

Answer

Risk transfer moves the financial consequences of a risk to another party, such as through insurance policies or contractual liability clauses.

Question 3

What is 'residual risk' in the context of process risk management?

Accepted Answer

The risk remaining after mitigation controls have been implemented

Answer

Residual risk is the level of risk that remains after controls, mitigations, or other risk responses have been applied to a raw or inherent risk.

Question 4

A process team identifies a risk but decides no action is needed because the cost of mitigation exceeds the expected loss. This is an example of:

Accepted Answer

Active risk acceptance

Answer

Active risk acceptance is a deliberate, documented decision to tolerate a risk, often because mitigation costs outweigh the potential impact.

Question 5

Which quantitative technique uses repeated random sampling to model the probability distribution of process outcomes under uncertainty?

Accepted Answer

Monte Carlo simulation

Answer

Monte Carlo simulation runs thousands of scenarios using random variable inputs to produce a probability distribution of possible outcomes.

(CPS) Certified Process Specialist Practice Test

(CPS) Certified Process Specialist Practice Test

CPS Risk Management & Mitigation 2