Question

Risk analysis helps the decision maker recognize the difference between the expected value of a decision alternative and the payoff that may actually occur. True False

Answer 1

Answer: True

Explanation: Risk analysis refers an evaluation process used in identifying the potential or possible issues, concerns or problems associated with certain business decisions or strategy which could pose a negative impact on an organization and also professing plausible solutions or strategies to mollify such risk.

Risk analysis helps decision makers or stakeholders identify and evaluate the potential issues and shortcomings associated with a certain decision, policy or business strategy, Proffer alternative strategies which could be implemented to achieve similar result and examine the trade-off between the actual and alternative decisions before reaching a compromise.

Answer 2

Answer:True

Explanation: Risk analysis is a term used to describe the processes through which the potential risks that can be encountered in an operation or a system is evaluated in order to make a decision as to which action to take or which one to forego.

Risk analysis is essential before embarking on any activity such as a financial investment.

WITH AN EFFICIENT RISK ANALYSIS, MOST OF THE POSSIBLE RISKS THAT CAN BE ENCOUNTERED IN A PROCESS OR ACTIVITY WILL BE DETERMINED AND DECISION MAKERS CAN MAKE CHOICES FROM SUCH RISK EVALUATION OR ANALYSIS.