23. Which one of the following is a risk that enterprise risk manag treat but th

Question

23. Which one of the following is a risk that enterprise risk manag treat but that traditional risk management would not? ement (ERM) would a. Risk of property damage to the organization's assets b. Risk of liability for damage or injury to a third party c Bisk of changes in economic conditions, such as growth or recession Risk of business interruption due to natural hazards such as flood or earthquake 24. Aligning risk with the organization's risk appetite defines a. Tolerable uncertainty b. Value at risk c. Social responsibility d. Compliance 25. "Love Canal" resulted in the passage of which Congressional Act? a. Resource Conservation and Recovery Act b. Clean Air Act c. Clean Water Act d. Comprehensive Environmental Response, Compensation, and Liability Act

Explanation / Answer

23. c. changes in economic conditions such as growth or recession.

These are opportunity and speculative risks, which are not considered in traditional risk management approach, but enterprise risk management would treat them as risks.

24. a. Tolerable uncertainty

It is a trade off betwen conflicting goals of minimizing risk and taking maximum leverage of the growth opportunity.

25. d.  Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)

CERCLA was enacted by Congress in response to Love Canal. Its objective is to address the liability and compensate for damage to environment due to release of hazardous substances.

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