Operational Risk

Risk is the _______.

• Effect of uncertainty in the objective/s

• Potential exposure to unexpected financial and non-financial deficiencies in the management of the organization

• Uncertain future events

• All of the above

In weighing Risk versus Return, what is/are the objective/s?

• Eliminate adverse effects of Threats

• Minimize positive effects of Opportunities

• Preserve adequate capital cover

• All of the above

Under which step in the Operational Risk Management cycle are we supposed to determine the Likelihood and Severity of a risk?

• Identify

• Measure

• Assess

• Monitor

The questions "What happened?" and "How did it happen?" fall under which step in the Operational Risk Management cycle?

• Measure

• Control

• Monitor

• Report

In the ORM Governance Structure, who aims to provide Independent Assurance?

• Board of Directors

• Compliance Office

• Internal Audit

• Risk Oversight Committee

Operational Risk is the risk of loss resulting from __________.

• Inadequate or failed internal processes

• People and systems

• External events

• All of the above

Which of the following Operational Risk Management Goals is the most important and therefore should come first?

• Satisfy regulatory requirements

• Expected returns are commensurate to risks taken

• No surprise environment driving continuous self-improvement

• Improve financial performance thru lower losses, reduced volatility and efficient capital usage

Which of the following Basel Event Type pertains to losses from natural disasters and other external events?

• Damage to Physical Assets

• Business Disruption & Systems Failure

• Execution Delivery & Process Management

• Clients, Products & Business Practices

The bank’s 2nd line of defense is ____________

• All personnel

• Internal Audit Group

• Risk Management Office & Compliance

• Senior Management

Which of the following Operational Risk Management tools serves as an internally driven process to identify the strengths and weaknesses of the operational risk environment?  

• Risk and Control Self- Assessment (RCSA)

• Key Risk Indicators (KRIs)

• Risk Incident Reporting (RIR)

• Loss Event Database (LED)