Business Quiz: Key Principle Of Risk Management Programs
Risk management is an area of knowledge that most managers are expected to understand to a certain level. Effective risk management ensures the continuity of a business's operations. There are different vital principles when it comes to risk management programs. Test your understanding of said principles by taking the quiz below and sharing it with the rest of your classmates.
Questions and Answers
- 1.
What is a key principle of risk management programs?
- A.
Security controls should be protected through the obscurity of their mechanisms.
- B.
Don't spend more to protect an asset than it is worth.
- C.
Apply controls in ascending order of risk.
- D.
Risk avoidance is superior to risk mitigation.
Correct Answer
B. Don't spend more to protect an asset than it is worth.Explanation
The key principle of risk management programs is to not spend more to protect an asset than it is worth. This means that organizations should carefully evaluate the value of their assets and the potential impact of risks before investing in expensive security measures. It emphasizes the importance of cost-benefit analysis and ensuring that the cost of implementing controls is justified by the value of the asset being protected. This principle helps organizations prioritize their resources and make informed decisions to effectively manage risks.Rate this question:
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- 2.
Adam is evaluating the security of a web server before it goes live. He believes that an issue in the code allows an SQL injection attack against the server. What term describes the issue that Adam discovered?
- A.
Threat
- B.
Vulnerability
- C.
Risk
- D.
Impact
Correct Answer
B. VulnerabilityExplanation
The term that describes the issue that Adam discovered is "vulnerability." A vulnerability refers to a weakness or flaw in a system or software that can be exploited by attackers. In this case, Adam believes that there is a vulnerability in the code of the web server that allows for an SQL injection attack. This means that the server is susceptible to having malicious SQL code injected into its database, potentially leading to unauthorized access or data manipulation.Rate this question:
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- 3.
Adam's company recently suffered an attack where hackers exploited an SQL injection issue on their web server and stole sensitive information from a database. What term describes this activity?
- A.
Event
- B.
Outage
- C.
Incursion
- D.
Incident
Correct Answer
D. IncidentExplanation
The term "incident" describes the activity where hackers exploited an SQL injection issue on Adam's company's web server and stole sensitive information from a database. An incident refers to any event that disrupts the normal functioning of a system or compromises its security. In this case, the SQL injection attack and data theft qualify as an incident.Rate this question:
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- 4.
Joe is responsible for the security of the industrial control systems for a power plant. What type of environment does Joe administer?
- A.
Supervisory Control and Data Acquisition (SCADA)
- B.
Embedded
- C.
Mobile
- D.
Mainframe
Correct Answer
A. Supervisory Control and Data Acquisition (SCADA)Explanation
Joe administers the environment of Supervisory Control and Data Acquisition (SCADA). SCADA systems are used to monitor and control industrial processes, such as power plants. They provide real-time data and allow operators to remotely control and manage the systems. Therefore, Joe's responsibility for the security of the industrial control systems for a power plant indicates that he administers the SCADA environment.Rate this question:
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- 5.
Beth is conducting a risk assessment. She is trying to determine the impact a security incident will have on the reputation of her company. What type of risk assessment is best suited to this type of analysis?
- A.
Quantitative
- B.
Financial
- C.
Qualitative
- D.
Objective
Correct Answer
C. QualitativeExplanation
A qualitative risk assessment is best suited to determine the impact a security incident will have on the reputation of a company. This type of analysis focuses on gathering and evaluating subjective information, such as opinions, perceptions, and qualitative data, rather than relying on numerical values or financial measurements. By considering factors such as public perception, brand image, and stakeholder trust, a qualitative risk assessment can provide a comprehensive understanding of the potential reputation damage that may result from a security incident.Rate this question:
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- 6.
Kim is the risk manager for a large organization. She is evaluating whether the organization should purchase a fire suppression system. She consulted a variety of subject matter experts and determined that there is a 1 percent chance that a fire will occur in a given year. If a fire occurred, it would likely cause $2 million in damage to the facility, which has a $10 million value. Given this scenario, what is the exposure factor?
- A.
1 percent
- B.
10 percent
- C.
20 percent
- D.
50 percent
Correct Answer
C. 20 percentExplanation
The exposure factor refers to the percentage of loss that would occur if a specific risk event were to happen. In this scenario, the exposure factor can be calculated by dividing the potential damage caused by a fire ($2 million) by the value of the facility ($10 million) and multiplying by 100 to get a percentage. Therefore, the exposure factor is 20 percent.Rate this question:
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- 7.
Kim is the risk manager for a large organization. She is evaluating whether the organization should purchase a fire suppression system. She consulted a variety of subject matter experts and determined that there is a 1 percent chance that a fire will occur in a given year. If a fire occurred, it would likely cause $2 million in damage to the facility, which has a $10 million value. Given this scenario, what is the single loss expectancy (SLE)?
- A.
2,000
- B.
20,000
- C.
200,000
- D.
2,000,000
Correct Answer
D. 2,000,000Explanation
The single loss expectancy (SLE) is calculated by multiplying the asset value by the probability of a loss occurring. In this scenario, the asset value is $10 million and the probability of a fire occurring is 1 percent. Therefore, the SLE would be $10 million x 0.01 = $2 million.Rate this question:
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- 8.
Kim is the risk manager for a large organization. She is evaluating whether the organization should purchase a fire suppression system. She consulted a variety of subject matter experts and determined that there is a 1 percent chance that a fire will occur in a given year. If a fire occurred, it would likely cause $2 million in damage to the facility, which has a $10 million value. Given this scenario, what is the annualized loss expectancy (ALE)?
- A.
2,000
- B.
20,000
- C.
200,000
- D.
2,000,000
Correct Answer
B. 20,000Explanation
The annualized loss expectancy (ALE) is calculated by multiplying the probability of an event occurring by the potential loss if the event does occur. In this case, the probability of a fire occurring is 1 percent (0.01) and the potential loss is $2 million. Therefore, the ALE would be 0.01 x $2 million = $20,000.Rate this question:
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- 9.
Purchasing an insurance policy is an example of the ____________ risk management strategy.
- A.
Reduce
- B.
Transfer
- C.
Accept
- D.
Avoid
Correct Answer
B. TransferExplanation
Purchasing an insurance policy is an example of the transfer risk management strategy because it involves transferring the financial risk of potential losses to the insurance company. By paying premiums, the individual or organization transfers the responsibility of bearing the financial burden of an uncertain event to the insurer. In case of any covered loss or damage, the insurance company will compensate the policyholder, thus reducing their financial risk.Rate this question:
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- 10.
Alan is the security manager for a mid-sized business. The company has suffered several serious data losses when mobile devices were stolen. Alan decides to implement full disk encryption on all mobile devices. What risk response did Alan take?
- A.
Reduce
- B.
Transfer
Correct Answer
A. ReduceExplanation
Alan took the risk response of "Reduce" by implementing full disk encryption on all mobile devices. This measure reduces the risk of data loss in case the devices are stolen, as the encrypted data would be inaccessible to unauthorized individuals.Rate this question:
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Quiz Review Timeline +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
May 15, 2018Quiz Created by
Mekaelejigu
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