Risk Management With Ant And Grasshopper

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Quizzes Created: 1 | Total Attempts: 422

Questions: 5 | Attempts: 423 | Updated: Mar 21, 2023

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Risk Management With Ant And Grasshopper - Quiz

One of the best ways in which you can understand a concept is the use of perfect examples. Have you read the story of the ant and the grasshopper? These two animals have a thing or two to teach on risk management. Try and read the story and see what you got on risk management from the story by taking the quiz below.

Questions and Answers

1.

What is the biggest risk for Ant and Grasshopper during winter?
- A.
  
  Winter cold
- B.
  
  Starvation from food shortage
- C.
  
  Short days
- D.
  
  Naturals disasters, e.g. snowstorms
Correct Answer
B. Starvation from food shortage

Explanation
The biggest risk is the shortage of food, which is the central point of the story. Cold certainly is an additional risk, and snowstorms might also be a risk, but we don't know much about the climate in which Ant and Grasshopper are living.

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2.

Who does better at managing risk?
- A.
  
  The Ant
- B.
  
  The Grasshopper
Correct Answer
A. The Ant

Explanation
The ant does better at managing risk because ants are known for their hard work, discipline, and ability to plan ahead. They gather and store food during the summer months to prepare for the winter when food is scarce. This behavior demonstrates their ability to assess and mitigate potential risks. On the other hand, the grasshopper is known for its carefree and lazy nature, often neglecting to prepare for the future. Therefore, the ant is more adept at managing risk compared to the grasshopper.

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3.

How does the Ant manage the risk?
- A.
  
  By taking an insurance
- B.
  
  By working hard
- C.
  
  By preparing for the risk event
- D.
  
  The Ant didn't mange risk, he just was lucky
Correct Answer
C. By preparing for the risk event

Explanation
The Ant certainly didn't survive by luck only. Also, working does not in itself manage risk: If the Ant had worked hard, but used all his earnings in summer, he would be in the same situation as the Grasshopper. It is his preparation for the very likely risk event, i.e. winter and its food shortage, that keeps the Ant safe here. The Ant could also have taken an insurance from a third party, which then could supply him with food in the situation of a crisis.

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4.

Let us try to understand the effect of saving food during summer. By not using all his food in summer...
- A.
  
  ... the Ant averages the impact of the risk over time.
- B.
  
  ... the Ant increases the amount of food.
- C.
  
  ... the Ant increases the quality of food.
- D.
  
  ... the Ant stays fit and in shape.
Correct Answer
A. ... the Ant averages the impact of the risk over time.

Explanation
The total amount of food does not change through saving up in summer. If the storing of food would increase or decrease its quality will depend on the type of food. The risk management effect is the averaging of the impact of the risk over time: The Ant saves in times of surplus for a time of shortage, in this way ensuring a constant supply of food.

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5.

Now let's have a look at the Grasshopper. There are several known problems and behavioral biases that prevent people or communities from implementing a risk management strategy. Which of those did the Grasshopper show most strongly in our story?
- A.
  
  Lack of information or knowledge
- B.
  
  Overconfidence
- C.
  
  Procrastination
- D.
  
  Short-term thinking
Correct Answer
D. Short-term thinking

Explanation
The main reason which prevented the Grasshopper from also implementing a risk management strategy was his short-term thinking: "Won't be winter till... the winter. It's summer now. Why worry about the winter?" He might also show overconfidence and underestimate the severity of winter (which poses a threat to his life) or lack the knowledge about this severity. Procrastination, i.e. delaying actions, does not play a role here, since the Grasshopper never intended to take any action.

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Current Version
Mar 21, 2023

Quiz Edited by
ProProfs Editorial Team
Jul 12, 2014

Quiz Created by
Dfiggen

Risk Management With Ant And Grasshopper

What is the biggest risk for Ant and Grasshopper during winter?

Who does better at managing risk?

How does the Ant manage the risk?

Let us try to understand the effect of saving food during summer. By not using all his food in summer...

Now let's have a look at the Grasshopper. There are several known problems and behavioral biases that prevent people or communities from implementing a risk management strategy. Which of those did the Grasshopper show most strongly in our story?