Risk Assessment & Mitigation Flashcards
7 cards from real CAM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Assessment & Mitigation flashcards as text
A client's key executive sponsor unexpectedly leaves the company. Which risk mitigation approach would BEST protect the account relationship?
Answer: Develop multi-threaded relationships with multiple stakeholders at the client organization
Multi-threading ensures the account relationship is not dependent on a single contact, reducing key-person risk within the client organization.
When quantifying financial risk in an account, which metric expresses the maximum potential loss over a specific time period at a given confidence level?
Answer: Value at Risk (VaR)
Value at Risk (VaR) quantifies the maximum expected loss over a defined period at a specific probability level, commonly used in financial risk assessments.
A client requests that your company store sensitive personal data on their behalf without a formal data processing agreement. What risk does this create?
Answer: Data privacy and regulatory compliance risk
Processing personal data without a formal agreement violates regulations such as GDPR and CCPA, exposing both parties to significant legal and financial penalties.
Which of the following BEST describes a 'risk appetite' statement in account management?
Answer: The level and type of risk an organization is willing to accept in pursuit of its objectives
A risk appetite statement defines the boundaries of acceptable risk-taking, guiding account managers in decision-making and escalation protocols.
An account manager notices a client's competitor has launched a disruptive product that could significantly reduce the client's revenue. Which risk type does this represent for the account?
Answer: Strategic/market risk
Competitive disruption affecting a client's market position represents strategic and market risk, which can cascade into reduced spending and churn.
Which contract mechanism is MOST effective at mitigating the risk of scope creep turning into uncompensated work?
Answer: Change Order Procedures (COPs)
Change Order Procedures formally document and price scope changes, preventing uncontrolled expansion of work without corresponding revenue.
In a risk heat map, risks plotted in the upper-right quadrant (high likelihood, high impact) should be treated with which priority?
Answer: Highest priority; immediate mitigation or escalation required
High likelihood combined with high impact places a risk in the critical zone, demanding immediate attention and active mitigation or escalation.