mor_foundation Management of Risk Foundation (3rd edition) Practice Questions
Prepare for mor_foundation with more than an answer.
- Exam fee
- $580 USD
- Level
- Foundation
Domains covered on the exam 7
- M_o_R Principles25%
- M_o_R Approach20%
- M_o_R Process25%
- Embedding and Reviewing M_o_R10%
- M_o_R Perspectives10%
- Tools and Techniques7%
- Risk Specialisms3%
- 1
A government agency is implementing a new public-facing IT system. The project is currently in the execution phase. A risk that was previously identified, 'unexpectedly high user adoption causing server overload,' has now occurred. The system is slow and frequently crashes, leading to public complaints. The management team must now focus on restoring service and managing the consequences. Which M_o_R document is the most appropriate place to manage this situation now that the risk has materialized?
flowchart TD A[Risk Identified: High User Adoption] --> B{Risk Occurs?} B -->|No| C[Continue Monitoring] B -->|Yes| D[Risk becomes an Issue] D --> E[Log in Issue Log] E --> F[Implement Corrective Actions]Show answer details
Correct answer: B
Once a risk materializes, it ceases to be an uncertainty and becomes a current problem, which is defined as an 'issue'. The Issue Log is the correct M_o_R document for tracking, managing, and resolving problems that are actively impacting the objective. The focus shifts from proactive risk management to reactive issue resolution.
- 2
The principle 'Facilitates continual improvement' is put into practice through the creation and maintenance of which key M_o_R document?
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Correct answer: C
The Risk Improvement Plan is the formal document used to capture, plan, and track actions aimed at enhancing the effectiveness and efficiency of the risk management process itself. It is the primary tool for operationalizing the 'Facilitates continual improvement' principle.
- 3
A project is assessing a threat with a very high potential financial impact but an extremely low probability of occurrence. How should the project team prioritize this risk during the 'Assess - Evaluate' step?
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Correct answer: B
The evaluation of a risk considers both its probability and impact. Even with low probability, a catastrophic impact can make a risk significant. The prioritization should be based on the combined assessment and then compared against the organization's defined risk appetite and tolerance levels to determine the required level of attention and response.
- 4
At which stage of the M_o_R process is communication performed?
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Correct answer: C
M_o_R emphasizes that communication is not a single step but a continuous activity that is integral to every part of the risk management process, from setting the context to implementing responses and reporting on progress.
- 5
A project manager is deciding between two responses for a technical threat. Response A is cheaper but only partially mitigates the risk. Response B is more expensive but almost completely eliminates the risk. To make an informed decision, the manager needs to compare the cost of each response against the potential reduction in risk exposure. Which M_o_R technique is most appropriate for this analysis?
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Correct answer: B
Cost-benefit analysis is the technique used to evaluate whether the cost of a risk response is justified by the benefit it provides (i.e., the reduction in risk exposure). It allows for a direct comparison of different response options to find the most cost-effective solution.
- 6
A mature organization is reviewing its risk management framework. The Chief Risk Officer (CRO) states, 'Our process must not only be technically sound but must also be perceived as a value-adding business function rather than a bureaucratic hurdle.' Which M_o_R principle directly supports the CRO's statement about demonstrating worth and contribution to the organization?
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Correct answer: C
The principle 'Achieves measurable value' directly addresses the need for risk management to demonstrate its contribution and worth to the organization. While aligning with objectives and informing decisions are part of this, the core idea of proving value and avoiding being seen as a mere cost center is encapsulated in this principle.
- 7
A multinational corporation attempts to deploy a single, highly detailed risk management process across all its global subsidiaries, from large manufacturing plants to small sales offices. The rollout faces significant pushback, with smaller offices complaining the process is too cumbersome. This situation highlights a failure to adhere to which M_o_R principle?
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Correct answer: B
The principle 'Fits the context' emphasizes that the M_o_R approach must be tailored to the specific environment of the organization. A one-size-fits-all approach is often ineffective. The corporation failed to adapt its risk management process to the differing contexts of its large plants and small offices, leading to the reported issues.
- 8
A risk facilitator is preparing for a workshop to identify risks for a critical new product launch. To ensure the 'Engages Stakeholders' principle is effectively applied, which THREE of the following actions are most crucial? (Select THREE)
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Correct answer: A, B, E
This is a fundamental first step to ensure the right people are involved and their perspectives are considered.
Effective engagement relies on clear, planned communication tailored to different stakeholder groups.
Assigning ownership makes engagement meaningful and accountable, ensuring stakeholders are actively involved in managing the risks relevant to them.
- 9
A project board is presented with a comprehensive risk register detailing several high-impact threats. However, they proceed with a decision that ignores these threats, leading to a significant budget overrun. This failure in governance is most directly related to a breakdown in which M_o_R principle?
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Correct answer: C
The core purpose of identifying and assessing risks is to provide information that leads to better, more informed decisions. In this scenario, the information was available but not used, representing a clear failure of the 'Informs decision-making' principle. The risk management activity did not influence the board's choice.
- 10
A financial services firm is trying to implement a more robust risk management framework. Historically, the company culture has been to assign blame to individuals when risks materialize, leading to staff hiding potential problems. The leadership team wants to foster an environment where employees feel safe to report threats and opportunities without fear of retribution.
To achieve this cultural shift, the firm has hired a risk management consultant. The consultant's primary recommendation is to revise the company's performance management system to reward proactive risk identification and to establish a 'no-blame' review process for incidents. This initiative is a practical application of which M_o_R principle?
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Correct answer: D
The scenario explicitly describes a 'blame culture' as the core problem. The consultant's recommendations—rewarding proactive identification and implementing no-blame reviews—are direct interventions aimed at transforming this into a supportive risk culture where open communication about risk is encouraged and valued. This aligns perfectly with the 'Creates a supportive culture' principle.
