FRM 2026 Part I Foundations of Risk Management Risk Management Free Quiz 1

Practice FRM 2026 Part I Foundations of Risk Management MCQs from Risk Management. Get instant results with Explanation.

General10 MCQs

1. What is risk management?

A. Risk management is only about purchasing insuranceB. Risk management is the process of identifying, assessing, and controlling risksC. Risk management is only for financial institutionsD. Risk management is a one-time activity

2. What are the key steps in the risk management process?

A. Risk management has only two steps: identification and mitigationB. Risk management is a linear process with no feedbackC. Risk management includes identification, assessment, response, and monitoringD. Risk management ends once risks are identified

3. What is risk appetite?

A. Risk appetite is the amount of risk an organisation is willing to acceptB. Risk appetite is the same as risk toleranceC. Risk appetite is the maximum possible lossD. Risk appetite is determined by regulators

4. What are the four main risk response strategies?

A. Risk responses include only avoid and reduceB. Risk responses include only transfer and acceptC. Risk responses are the same as risk identificationD. Risk responses include avoid, reduce, transfer, and accept

5. What is risk governance?

A. Risk governance is the same as risk managementB. Risk governance is the framework for managing risk, including roles and responsibilitiesC. Risk governance is only for financial institutionsD. Risk governance is optional

General10 MCQs

6. What is risk culture?

A. Risk culture is not relevant to risk managementB. Risk culture is the same as risk appetiteC. Risk culture is the shared values and attitudes about risk in an organisationD. Risk culture is set by external auditors

7. What is a risk owner?

A. A risk owner is responsible for managing a specific riskB. A risk owner is the same as the risk managerC. A risk owner is not needed if the organisation has a risk committeeD. Risk owners are only for financial risks

8. What is Value at Risk (VaR)?

A. VaR measures the actual lossB. VaR measures the average lossC. VaR is a measure of maximum profitD. VaR is a measure of the potential loss with a given confidence level

9. What is a risk map (heat map)?

A. A risk map is a list of all risks without prioritisationB. A risk map plots risks based on likelihood and impact to prioritise themC. A risk map is only for operational risksD. A risk map is not used in risk management

10. What is scenario analysis in risk management?

A. Scenario analysis is the same as sensitivity analysisB. Scenario analysis predicts the most likely futureC. Scenario analysis explores alternative futures to assess risks and opportunitiesD. Scenario analysis is only used for financial risks

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