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Strategic Decision Making & Risk Management Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. One of the biggest mistakes a manager can make is to _____.

Question 2 2. You run one of the departments in a large company that works in government bonds, futures, and other financial papers. One of your coworkers is being tasked with deciding whether or not to invest in an African country that has had a civil war recently, and has been mostly closed off to the media. What would you advise that he do first as he prepares to make his decision?

Question 3 3. Jane, the CEO of a pharmaceutical company, has delegated the task of determining whether the firm should launch a new line of obesity-reducing pills. She instructs her subordinate to 1) assess the firm's current situation, 2) define all of the relevant variables, and 3) focus only on the issue of launching a new line when weighing any risks associated with the uncertainty of the outcome. What was unusual about this approach to weighing risk?

Question 4 4. How does technological change affect risk management?

Question 5 5. Samantha is a CEO of a large marketing company. She is trying to determine what external factors may impact the business in the next few months. She is concerned about the 2018 midterm elections and has decided to invest money into a PAC of a pro-business independent candidate. Another cause for concern is the increasing number of complaints regarding her IT sector. Which of the following may impact her business, and how can she manage these factors?

Page 2

Question 6 6. Which one of the following is NOT a step involved in risk management?

Question 7 7. A _____ is one type of analysis that is commonly performed when collecting and analyzing the data that will be used to construct the risk/probability matrix.

Question 8 8. The primary purpose of a risk/probability matrix is to:

Question 9 9. A risk/probability matrix measures:

Question 10 10. The process of determining a control's effectiveness at reducing or minimizing the risk is what stage of the risk management process?

Page 3

Question 11 11. Risks that have a high probability of occurrence and a high financial impact should be ranked _____ a risk that has a low probability of occurrence and a low financial impact.

Question 12 12. Insurance is a _____ type of risk control.

Question 13 13. What should project managers do when preliminary task estimates differ from Monte Carlo simulation?

Question 14 14. Which Monte Carlo simulation model run should be used by project managers?

Question 15 15. What is the BEST use of Monte Carlo simulation?

Page 4

Question 16 16. The definition of Bounded Rationality is to

Question 17 17. 'When Simon chose to layoff Jared because he was the first poor performing employee to cross his mind, this would be an example of what type of heuristic?

Question 18 18. What is another name for the Bounded Rationality Model?

Question 19 19. Which is the BEST definition of risk assessment?

Question 20 20. What factors do we use to score our risks?

Page 5

Question 21 21. What kinds of events should be addressed?

Question 22 22. Which of the following is the definition used in this lesson for business risk?

Question 23 23. Which of the following is NOT one of the risk management options given to management when they look for ways to manage risk?

Question 24 24. Which of the following is the best-fitting example of a situation of operational risk?

Question 25 25. Which of the following are we trying to determine when we talk about weight risk?

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Question 26 26. Which one of the following is an example of environmental change related to the external political environment?

Question 27 27. Stewart owns a company that manufactures typewriters. The danger that computers will replace typewriters almost entirely could be classified on a risk/probability matrix as:

Question 28 28. Risk management is the process of identifying and assessing risks, _____, implementing and evaluating controls to reduce the impact of risks.

Question 29 29. What is the most widely used method of sensitivity analysis?

Question 30 30. What is a term for shortcuts in making a quick decision to maintain mental activity?

Strategic Decision Making & Risk Management Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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