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NEW QUESTION 24
John is a mid-level manager and has created a risk / reward matrix about four potential opportunities at his company White Ducky Limited. He will present his research to a board meeting next week. He has categorised the four opportunities as the following. Which of these opportunities should John recommend the board
'consider'? Select TWO.

• A. high risk/ high reward
• B. low risk/ low reward
• C. low risk / high reward
• D. high risk/ low reward

Answer: A,B

Explanation:
Explanation
High risk/ high reward, and low risk/ low reward are the options that should be CONSIDERED. This is according to the risk/ reward matrix on p. 6. Items that are low risk/ high reward should be PROGRESSED and items which are high risk / low reward should be AVOIDED.

NEW QUESTION 25
Standard Deviation is the measure of the variation between the values in a range of data. From which of the following could you calculate Standard Deviation?

• A. normal distribution
• B. poisson distribution
• C. binomial distribution
• D. value at risk

Answer: A

Explanation:
Explanation
This is calculated from normal distribution. In normal distribution most of the values are concentrated around the middle of the data set- standard deviation identifies how far a data point is from this average. See p.128 for more information

NEW QUESTION 26
In an organisation, who is responsible for creating a risk assessment register?

• A. Procurement Manager
• B. the CEO
• C. Risk Manager / H+S Manager
• D. Cross-Functional Team

Answer: D

Explanation:
Explanation
A Cross Functional Team should create a risk register. It shouldn't be the responsibility of one person to do this- more points of view will lead to more risks being identified. Accountability for the Risk Register may however sit with the CEO or a Department Manager. This is explained on p. 132

NEW QUESTION 27
Petra Ltd is a manufacturer of upmarket baked goods and they have a range which is gluten free and therefore suitable for customers who have an intolerance of wheat. For this reason Petra Ltd is very strict about the ingredients that it sources. It's main supplier has provided written agreement that they will test all ingredients in their processing factory to ensure that they are suitable for the gluten free diet before delivery is made, and once delivery is made the materials will be deemed accepted by the buyer. Is Petra right to accept this arrangement?

• A. no- Petra should arrange for additional tests to be conducted on the deliveries and only accept them once these tests have been completed
• B. yes- this arrangement places the risk on the supplier rather than Petra
• C. no - this arrangement is unacceptable and Petra should void the contract
• D. yes- this reduces the risk of unsuitable materials entering Petra's factory

Answer: A

Explanation:
Explanation
Petra should arrange for additional tests to be conducted. This question is based on a real example in the exam.
In this scenario there is still significant risk for Petra even if the supplier is testing the materials. The supplier could miss something, or forge the results with disastrous consequences for Petra's customers. Moreover it would severely damage Petra's reputation. Therefore the wise thing would be for Petra to conduct additional tests in-house to ensure they are happy with the products and only then accept them. This could be an audit of
10% of deliveries to ensure compliance. Acceptance Testing is discussed in the textbook on p.70

NEW QUESTION 28
......

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