Risk Identification & Evaluation Flashcards
7 cards from real RIMS 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 Identification & Evaluation flashcards as text
Which quantitative technique models thousands of possible scenarios by varying input assumptions to produce a probability distribution of outcomes?
Answer: Monte Carlo simulation
Monte Carlo simulation uses random sampling across input variables to generate a statistical distribution of possible outcomes, quantifying uncertainty.
In a risk heat map, risks plotted in the upper-right quadrant are characterized by:
Answer: High likelihood and high impact
The upper-right quadrant of a heat map represents risks with high likelihood and high impact, requiring immediate priority attention.
A risk manager reviews historical loss data to identify patterns and predict future losses. This approach is an example of:
Answer: Predictive analytics using actuarial methods
Actuarial methods use historical loss data, statistical models, and probability theory to forecast future loss patterns.
The concept of 'risk interdependency' is important in risk identification because:
Answer: It helps identify how one risk event can trigger or amplify other risks
Risk interdependencies reveal how risks are connected, allowing organizations to understand cascading effects and systemic vulnerabilities.
Which of the following best describes a 'black swan' event in risk management?
Answer: A rare, high-impact event that was not anticipated or modeled in advance
Black swan events are characterized by their extreme rarity, massive impact, and the tendency for people to rationalize them as predictable only in hindsight.
A loss exposure analysis for property risks would typically include assessment of all EXCEPT:
Answer: Employee turnover rates in the risk department
Property loss exposure analysis focuses on physical asset values and loss scenarios; employee turnover in the risk department is an HR metric unrelated to property exposure.
The 'bowtie' risk analysis model visually depicts:
Answer: Threat pathways on the left leading to a hazard event and consequence pathways on the right
The bowtie model shows causes (threats) on the left, the top event in the center, and consequences on the right, with barriers on both sides.