Lesson 2.7.1
2.7.1 Risk and uncertainty Quiz: OCR Business, Unit 2
20 questions
In partnership with Revision Ninja
Lesson 2.7.1, Risk and uncertainty: 20 multiple choice questions for the OCR Business (H431), Unit 2: Business objectives and strategy, written with Revision Ninja.
Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.
The 20 questions
-
How does risk differ from uncertainty in business decision-making?
- Probabilities are known
- Costs are zero
- Outcomes are certain
- Losses are avoided
-
What is the primary purpose of a business contingency plan?
- Maximising daily profit
- Setting staff wages
- Preparing for crisis
- Reducing tax liabilities
-
An outcome has a 60% chance of £100,000 profit and 40% chance of £0. Expected value is?
- £60,000
- £40,000
- £50,000
- £100,000
-
Which technique assesses the impact of changing one key variable on financial outcomes?
- Variance analysis
- Ratio analysis
- Sensitivity analysis
- Break-even analysis
-
Which of the following represents an unquantifiable risk for a business?
- Standard delivery delays
- Bad debt allowance
- Sudden political upheaval
- Historical machine failure
-
A firm buys insurance against flood damage. Which risk strategy is being used?
- Risk acceptance
- Risk transfer
- Risk elimination
- Risk avoidance
-
What do square nodes represent in a business decision tree diagram?
- Chance outcomes
- Expected values
- Final payoffs
- Decision points
-
What do circular nodes represent in a business decision tree diagram?
- Chance events
- Cost totals
- Strategic goals
- Decision points
-
A project has an expected value of £80,000 and costs £30,000. What is the net gain?
- £110,000
- £80,000
- £30,000
- £50,000
-
What is a major limitation of using decision trees for strategic planning?
- Ignored qualitative factors
- Guaranteed profits
- No numerical data
- Includes all variables
-
A UK exporter fixes exchange rates in advance. What risk mitigation method is this?
- Trade protectionism
- Asset stripping
- Market penetration
- Financial hedging
-
Which risk category includes equipment failure and employee errors within a firm?
- Strategic risk
- Compliance risk
- Systemic risk
- Operational risk
-
A business fails because a competitor launches superior technology. What risk was this?
- Compliance risk
- Strategic risk
- Liquidity risk
- Operational risk
-
Which attitude to risk describes a board comfortable taking major risks for high returns?
- Risk-seeking
- Risk-averse
- Risk-neutral
- Risk-passive
-
Why do businesses plot risks on a matrix of probability and impact?
- Reducing tax obligations
- Calculating precise profit
- Eliminating all risks
- Prioritising risk responses
-
A company enters three unrelated markets to spread commercial risk. What strategy is this?
- Cost leadership
- Market penetration
- Diversification
- Vertical integration
-
What term describes an extremely rare, high-impact event that is difficult to predict?
- Grey Rhino event
- Red Herring event
- Blue Ocean event
- Black Swan event
-
An option has a 70% chance of £50m profit and 30% chance of £10m loss. Expected value is?
- £32m
- £40m
- £35m
- £38m
-
A new tax law reduces a manufacturer's profits. What category of risk is this?
- Financial risk
- Compliance risk
- Operational risk
- Internal risk
-
Which document outlines procedures to keep critical functions running during a crisis?
- Business continuity plan
- Income statement
- Annual report
- Marketing plan
Related quizzes
- Different stakeholder and business objectives Quiz · 2.1.1 · 20 questions
- Stakeholders Quiz · 2.2.1 · 20 questions
- Mission statement Quiz · 2.3.1 · 20 questions
- Corporate social responsibility (CSR) Quiz · 2.4.1 · 20 questions
- Strategy and implementation Quiz · 2.5.1 · 20 questions
- Business plan Quiz · 2.6.1 · 20 questions
- Opportunity cost Quiz · 2.8.1 · 20 questions
- Contingency planning and crisis management Quiz · 2.9.1 · 20 questions
- Models of strategic choice Quiz · 2.10.1 · 20 questions
- Measures of performance: financial and non-financial Quiz · 2.11.1 · 20 questions