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

When working with risk owners to develop risk treatment, it is necessary to?

1. Consider risks equally

2. Consider risk within the context of the business

3. Generate a positive return on investment in the current year

4. Seek approval from the Board of Directors

The correct answer is: Consider risk within the context of the business

Considering risk within the context of the business is essential when working with risk owners to develop risk treatment. This approach ensures that the specific circumstances, goals, and operational realities of the organization inform how risks are identified, assessed, and prioritized. By understanding the business context, risk managers can align treatment strategies with the organization's objectives, ensuring that risk management contributes to the overall success of the business rather than being a standalone function. This focus on the business context allows for a more nuanced analysis of potential risks, including their consequences and likelihood within various business scenarios. It enables risk owners to make informed decisions, ensuring that risk treatment plans are relevant and practical. Additionally, this perspective supports a strategic approach to risk management, allowing for the optimization of resources and better alignment with stakeholder expectations. Other options may not encapsulate the holistic approach required for effective risk treatment. For instance, considering risks equally does not account for varying levels of risk impact and likelihood, which are crucial for prioritization. Generating a positive return on investment in the current year may overlook longer-term benefits and the comprehensive nature of risk management. Meanwhile, seeking approval from the Board of Directors, while important in certain contexts, is not a necessary step in the development of risk treatment with risk owners and may not