Operational Risk Management Quiz

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Higbee

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Quizzes Created: 26 | Total Attempts: 31,522

Questions: 10 | Attempts: 5,697 | Updated: Aug 19, 2023

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Do you know about operational risk management? What is the hazard? What is the definition of risk? Take this operational risk management quiz and check if you already know about the things we asked above. Operational risk management (abbreviated as ORM) is a recurring process that focuses on reporting risk issues. In short, we can say the operational risk is the risk of doing any business. Let's begin the quiz and learn more about it in detail.

Questions and Answers

1.

Hazard is defined as:
- A.
  
  A condition with the potential to cause personal injury or death, property damage,or mission degradation
- B.
  
  A condition with the potential to cause personal financial loss or property damage or mission degradation
- C.
  
  A condition with the potential to cause personal injury or death or mission completion
- D.
  
  A condition with the potential to cause property damage or mission degradation, or a revenue tax increase
Correct Answer
A. A condition with the potential to cause personal injury or death, property damage,or mission degradation

Explanation
The correct answer is a condition with the potential to cause personal injury or death, property damage, or mission degradation. This definition of hazard encompasses a range of potential consequences, including harm to individuals, damage to property, and negative impacts on mission objectives. It recognizes that hazards can pose risks to both human safety and the successful completion of a mission or task.

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2.

An expression of possible loss in terms of severity and probability is a definition of:
- A.
  
  Hazard
- B.
  
  Probability
- C.
  
  Severity
- D.
  
  Risk
Correct Answer
D. Risk

Explanation
Risk is the correct answer because it refers to the expression of possible loss in terms of severity and probability. Risk is a measure of the likelihood and potential impact of an event or action, taking into account both the probability of occurrence and the potential consequences. It involves assessing and managing potential hazards, evaluating their severity and likelihood, and making informed decisions to mitigate or accept the associated risks.

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3.

Definition of Risk is:
- A.
  
  The likelihood that a hazard will result in a mishap or loss
- B.
  
  The likelihood that a hazard will result in a disaster
- C.
  
  The likelihood that a hazard will result in a favorable outcome
- D.
  
  The likelihood that a hazard will result in a change in command
Correct Answer
A. The likelihood that a hazard will result in a mishap or loss

Explanation
The correct answer is the likelihood that a hazard will result in a mishap or loss. This is because risk refers to the possibility or probability of an undesirable event or outcome occurring. In this case, the undesirable event or outcome is a mishap or loss, which can be caused by a hazard. Therefore, risk is the likelihood that a hazard will result in a mishap or loss.

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4.

The process of detecting hazards and assessing the associated risk is called:
- A.
  
  The right process
- B.
  
  Risk assessment
- C.
  
  Risk Management Process
- D.
  
  None of the above
Correct Answer
B. Risk assessment

Explanation
The process of detecting hazards and assessing the associated risk is called risk assessment. It involves identifying potential hazards, evaluating the likelihood and severity of the risks they pose, and determining appropriate measures to mitigate or manage those risks. Risk assessment is an essential step in risk management, as it helps organizations make informed decisions to protect people, assets, and the environment from potential harm.

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5.

The process of dealing with the risk associated with military operations, which include risk assessment, risk decision making, and implementation of effective risk controls is:
- A.
  
  Operational Rated Management
- B.
  
  Organized Risk Assessment
- C.
  
  Operational Risk Management
- D.
  
  Organized Risk Management
Correct Answer
C. Operational Risk Management

Explanation
Operational Risk Management is the correct answer because it refers to the process of identifying, assessing, and prioritizing risks associated with military operations. It involves making informed decisions about how to mitigate these risks and implementing effective controls to minimize their impact. This approach ensures that military operations are conducted in a safe and efficient manner, taking into account potential risks and their potential consequences.

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6.

Operational Risk Management Process includes the I.D of hazards, Assessing the hazards, Making risk decisions, Implement controls, and
- A.
  
  Take action
- B.
  
  Re-assessing the process
- C.
  
  Supervise
- D.
  
  Both A & B
Correct Answer
C. Supervise

Explanation
The given answer "Supervise" is the correct answer because it is a step in the Operational Risk Management Process. After implementing controls, it is important to supervise and monitor the effectiveness of those controls to ensure that they are working as intended and that any new risks or hazards are identified and addressed promptly. This step helps in maintaining the effectiveness of the risk management process and ensures ongoing risk mitigation.

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7.

Operational Risk Management:
- A.
  
  Is a decision making tool
- B.
  
  Increases ability to make informed decisions
- C.
  
  Reduces risks to acceptable levels
- D.
  
  All of the above
Correct Answer
D. All of the above

Explanation
Operational Risk Management is a comprehensive approach that involves decision making and enables organizations to make informed decisions. By identifying, assessing, and mitigating risks, it helps to reduce risks to acceptable levels. Therefore, the correct answer is "All of the above" as all the statements mentioned are true and describe the benefits and purpose of Operational Risk Management.

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8.

Causes of risk include all the following except:
- A.
  
  New Technology
- B.
  
  Change "The Mother of all Risk"
- C.
  
  Environmental influences
- D.
  
  Chemical breakdown
Correct Answer
D. Chemical breakdown

Explanation
Chemical breakdown is not a cause of risk. The other options, such as new technology, change, and environmental influences, can all contribute to risk. However, chemical breakdown does not directly cause risk.

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9.

The four ORM Principals are - 1. Accept risk when the benefits outweigh the cost 2. Accept no unnecessary risk 3. Anticipate and manage risk by planning and
- A.
  
  Make risk decisions at the right level
- B.
  
  Make risk decisions right away
- C.
  
  Make no decsions until after talking it over
- D.
  
  All of the above
Correct Answer
A. Make risk decisions at the right level

Explanation
The correct answer is "Make risk decisions at the right level" because one of the ORM (Operational Risk Management) principles is to anticipate and manage risk by planning. Making risk decisions at the right level means that decisions should be made by individuals who have the appropriate knowledge and authority to assess and mitigate the risks involved. This ensures that risk management is effective and efficient, as decisions are made by those who are best equipped to understand and address the potential risks.

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10.

ORM Levels of application include:
- A.
  
  Time crtical - On the run consideration of 5 steps
- B.
  
  Deliberate - Application of the complete 5 step process
- C.
  
  In-Depth - Complete 5-Step Process with detailed analysis
- D.
  
  All of the above
Correct Answer
D. All of the above

Explanation
The correct answer is "All of the above" because the question states that the ORM Levels of application include time critical, deliberate, and in-depth approaches, each of which involves the complete 5-step process. Therefore, all three options mentioned in the question are correct.

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Current Version
Aug 19, 2023

Quiz Edited by
ProProfs Editorial Team
Oct 14, 2009

Quiz Created by
Higbee

Operational Risk Management Quiz

Hazard is defined as:

An expression of possible loss in terms of severity and probability is a definition of:

Definition of Risk is:

The process of detecting hazards and assessing the associated risk is called:

The process of dealing with the risk associated with military operations, which include risk assessment, risk decision making, and implementation of effective risk controls is:

Operational Risk Management Process includes the I.D of hazards, Assessing the hazards, Making risk decisions, Implement controls, and

Operational Risk Management:

Causes of risk include all the following except:

The four ORM Principals are - 1. Accept risk when the benefits outweigh the cost 2. Accept no unnecessary risk 3. Anticipate and manage risk by planning and

ORM Levels of application include: