CS Risk Management & Mitigation 3

Question 1

Which of the following best describes a 'black swan' event in strategic risk management?

Accepted Answer

A rare, unpredictable event with severe consequences

Answer

Black swan events, popularized by Nassim Taleb, are characterized by their rarity, extreme impact, and retrospective predictability.

Question 2

In the context of supply chain risk, 'single-sourcing' represents which type of risk concentration?

Accepted Answer

Supplier dependency risk

Answer

Single-sourcing creates supplier dependency risk because disruption to one vendor can halt the entire supply chain with no alternative.

Question 3

A risk heat map plots risks according to which two dimensions?

Accepted Answer

Likelihood and impact

Answer

Risk heat maps visually display risks by plotting their probability of occurrence on one axis and their potential impact on the other.

Question 4

Which of the following is an example of a proactive risk mitigation strategy in strategic management?

Accepted Answer

Diversifying product lines before a market downturn occurs

Answer

Proactive mitigation involves taking preventive action before a risk materializes, such as diversifying to reduce market concentration risk.

Question 5

Under the ISO 31000 risk management standard, what is the correct sequence of the risk management process?

Accepted Answer

Identify → Assess → Treat → Monitor & Review

Answer

ISO 31000 specifies the process as: risk identification, risk assessment, risk treatment, and then ongoing monitoring and review.

(CS) Certified Strategist Practice Test