Emerging & Geopolitical Risks Flashcards
7 cards from real CRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Emerging & Geopolitical Risks flashcards as text
In the context of geopolitical risk, 'decoupling' between major economies primarily creates which category of risk for global businesses?
Answer: Supply chain fragmentation and market access risk
Economic decoupling between major powers forces companies to redesign global supply chains, restricts market access, and creates duplication costs as unified global markets bifurcate into competing blocs.
A risk analyst identifies that a foreign government has a history of renegotiating contracts after elections. This most directly represents:
Answer: Political interference and regulatory risk
Governments unilaterally renegotiating contracts post-election reflects political interference and regulatory risk, where the enforceability of legal agreements depends on political continuity.
Which of the following is the BEST leading indicator of potential social unrest in an emerging market?
Answer: A widening Gini coefficient alongside rising youth unemployment
Widening income inequality (Gini coefficient) combined with high youth unemployment is a classic predictor of social instability, as it creates a large, economically marginalized population with grievances.
The 'resource curse' hypothesis suggests that countries rich in natural resources often experience:
Answer: Weaker governance, conflict risk, and slower long-term growth
The resource curse describes how abundant natural resource wealth often leads to rent-seeking behavior, institutional corruption, conflict over resource revenues, and neglect of economic diversification.
A company's risk assessment reveals that 70% of its critical rare earth mineral supply comes from a single country. This best illustrates:
Answer: Concentration risk within geopolitical supply chains
Heavy reliance on a single country for critical inputs creates concentration risk, where geopolitical events in that country can catastrophically disrupt the entire supply chain.
The term 'polycrisis' in global risk management refers to:
Answer: Multiple simultaneous crises that interact and amplify each other's impact
A polycrisis occurs when several distinct crises interact simultaneously, such that their combined effect is greater than the sum of individual crises, creating compounding and unpredictable systemic effects.
When conducting a geopolitical risk scenario analysis, which scenario type best captures the 'tail risk' of extreme geopolitical outcomes?
Answer: Stress scenario modeling a severe but plausible geopolitical disruption
Stress scenarios model severe but plausible tail events—such as regional conflict escalation or major sanctions—that fall outside the base case but could have disproportionate impact on business operations.