PRMIA 8020 Quiz 1 Topic 7 Questions 1-5

Question: 1

An example of Credit Risk events with an Operational Risk component included?

AFailure in loan approval process leading to erroneously approved loans.

BPonzi Schemes.

CRogue Trading.

DPonzi Schemes & Rogue Trading.

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Question: 2

How should Near Misses and Opportunity Costs be treated within Operational Risk?

AIgnored.

BRecorded and Analyzed. Used in calculation of Operational Risk Capital.

CReported. Recorded and Analyzed. Not Used in calculation of Operational Risk Capital.

DReported, Recorded and Analyzed, Used in calculation of Operational Risk Capital.

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Question: 3

In the Basel III standardized approach for operational risk, what is the Business Indicator?

AIt is a proxy for operational risks that relate to near-miss events.

BIt is a non-financial-statement-based proxy for operational risk.

CIt is a scaling factor that is based on a bank's average historical losses.

DIt is a financial-statement-based proxy for operational risk.

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Question: 4

For which of the following reasons did the Turnbull Report have a significant impact on risk governance?

AIt defined the concept of risk governance for the insurance industry.

BIt was the first report to list the board as a proposed governance structure.

CIt was the first report to require a board to take specific account of risks and control systems for risks.

DIt was a report that led to the establishment of the US Federal Reserve.

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Question: 5

In relation to the template for writing policy documents, which one of the following pairings of requirements is correct? A well designed policy will include:

AA list of exceptions for the family of board members.

CA list of acceptable fonts and margin types.

CTo whom and in what form exceptions should be sought and the general exemptions e.g. areas to which the policy does not apply

DTo whom the policy applies to and how an additional management report should be allocated to.

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PRMIA 8020 Quiz:1 Topic:7 Questions:1-5