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Exam SCR topic 1 question 80 discussion

Actual exam question from GARP's SCR
Question #: 80
Topic #: 1
[All SCR Questions]

An EU juice producer heavily relies on Brazil’s supply of oranges to produce its top-selling orange juice brand. The producer anticipated steady growth, but production decreased due to the rise in mean temperature in Brazil.
The climate-related risk of mean temperature rise in Brazil increases what indirect effect?

  • A. The chronic market risk of a temperature rise disrupts the supply chain for oranges, reversing the significant asset write-offs for the juice producer.
  • B. The chronic physical risk of a temperature rise decreases the production of oranges and subsequently negatively impacts the profits of the juice producer by reducing the production of the juice brand.
  • C. The acute reputational transition risk of a temperature rise decreases production due to health-related issues with workers in Brazil, leading to reduced demand for the juice brand.
  • D. The acute physical risk of a temperature rise disrupts the supply chain for oranges, creating financial losses for the juice producer due to its inability to honor its supply contracts.
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Suggested Answer: B 🗳️
by Karnitschnig at April 15, 2023, 7:54 a.m.

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kavvv
6 months, 1 week ago
Seems like all the answers are wrong shomehow. The q's asked for an indirect impact. B is describing a direct impact. Increased temp > reduced production of oranges > lower profits. C would be more appropriate if it didn't have 'acute' in it. Increased temps > worsened working conditions impacting worker's health > indirectly results in reputational risk to the company due to consumer's awareness
upvoted 1 times
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Riskr
11 months, 2 weeks ago
Selected Answer: B
B is the best
upvoted 1 times
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Riskr
11 months, 3 weeks ago
Selected Answer: B
B is the best. Temperature ise is chronic not acute.
upvoted 1 times
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Aziz09081
11 months, 3 weeks ago
B is best ans
upvoted 2 times
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Karnitschnig
11 months, 3 weeks ago
Selected Answer: B
Temperature rise is chronic, not acute, so D is out. B is best answer
upvoted 2 times
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