Question

Which of the following statements about the risk management matrix are correct?

A. It considers a single risk.
B. It can also be referred to as a risk map.
C. It includes all of a firms risk exposures.
D. It involves charting the entire spectrum of a firm's risk.
E. It includes on one axis, categories of relative frequency and on the other, categories of relative severity.

Answer 1

A risk management matrix is a tool used by firms to assess and prioritize risks. It involves charting the entire spectrum of a firm's risk exposures. The matrix typically includes on one axis, categories of relative frequency and on the other, categories of relative severity.

Step-by-step explanation:

A risk management matrix is a tool used by firms to assess and prioritize risks. It involves charting the entire spectrum of a firm's risk exposures. The matrix typically includes on one axis, categories of relative frequency and on the other, categories of relative severity. The correct statements about the risk management matrix are:

1. It can also be referred to as a risk map. The matrix is sometimes called a risk map because it visually displays the different levels of risk.
2. It involves charting the entire spectrum of a firm's risk. The matrix considers all of a firm's risk exposures and helps in identifying and categorizing them.
3. It includes on one axis, categories of relative frequency and on the other, categories of relative severity. The matrix uses these two dimensions to plot the risks and prioritize them based on their likelihood and impact.