Risk and Insurance Management Society (RIMS) Certified Risk Management Professional (CRMP) Practice Exam

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What type of risks does strategic risk management aim to address?

Operational risks
Financial risks
Project risks
Strategic uncertainties

The correct answer is: Strategic uncertainties

Strategic risk management focuses on addressing uncertainties that can impact an organization's ability to achieve its long-term goals and objectives. These risks arise from factors such as market dynamics, competitive pressures, regulatory changes, and broader economic conditions. By identifying and managing strategic uncertainties, organizations can align their risk management practices with their strategic objectives, ensuring that they can adapt and respond to changes in their operating environment. Operational risks, financial risks, and project risks, while important, relate more specifically to day-to-day operations, financial performance, and individual projects, respectively. They do not encompass the broader scope of uncertainties that affect the entire organization’s strategy and long-term planning. Hence, strategic uncertainties are the primary focus of strategic risk management, as they help organizations navigate complex environments and make informed decisions regarding their future direction.