Explanation/Reference:
Explanation:
Watch-list contains risks with low rating of probability and impact. This list is useful for future monitoring of low risk factors.
Incorrect Answers:
A, B: No such documents as risk alarm and observation list is prepared during risk identification process.
D: Risk register is a document that contains the results of the qualitative risk analysis, quantitative risk analysis, and risk response planning. Description, category, cause, probability of occurring, impact on objectives, proposed responses, owner, and the current status of all identified risks are put in the risk register.

Section: Volume A
Explanation:
Pilot testing and reviewing of performance data to verify operation against design are done before relying on control.
Incorrect Answers:
B: Discovering risk exposure helps in identifying the severity of risk, but it does not play any role in specifying the reliability of control.
D: Articulating risk is the first phase in the risk response process to ensure that information on the true state of exposures and opportunities are made available in a timely manner and to the right people for appropriate response. But it does not play any role in identifying whether any specific control is reliable or not.

is incorrect. Hedging is the process of managing the risk of price changes in physical
material by offsetting that risk in the futures market. In other words, it is the avoidance of risk. So,
it only avoids risk but can not assure protection against risk.