Operational Risk Management
Financial Risk and Regulation Series
Review Questions
Chapter 1
Operational Risk Measurement
Review Question 1: Operational Risk Chapter 1
Q How does Basel II define operational risk?
a. As those risks not captured by market and credit risks.
A
b. As the risk of loss resulting from inadequate or failed
processes, people and systems or from external events.
c. As the risk arising from execution of a company's business
functions.
d. As a form of risk that summarizes the risks a company or
firm undertakes when it attempts to operate within a given
field or industry.
Review Question 1: Operational Risk Chapter 1 Answer
Q How does Basel II define operational risk?
a. As those risks not captured by market and credit risks.
A
b. As the risk of loss resulting from inadequate or failed
processes, people and systems or from external
events.
c. As the risk arising from execution of a company's business
functions.
d. As a form of risk that summarizes the risks a company or
firm undertakes when it attempts to operate within a given
field or industry.
Review Question 2: Operational Risk Chapter 1
Q An organization’s enterprise risk management framework
defines its risk profile and can encompass which of the
following?
a. Regulatory capital risk
A
b. Structural developments and industry position
c. Industry competitiveness
d. Strategic and geopolitical risks
Review Question 2: Operational Risk Chapter 1 Answer
Q An organization’s enterprise risk management framework
defines its risk profile and can encompass which of the
following?
a. Regulatory capital risk
A
b. Structural developments and industry position
c. Industry competitiveness
d. Strategic and geopolitical risks
Review Question 3: Operational Risk Chapter 1
Q Which one of the following is not a main building block of
an operational risk framework?
a. Loss data collection.
A
b. Risk and control self-assessment.
c. Compliance document preparation.
d. Scenario analysis.
Review Question 3: Operational Risk Chapter 1 Answer
Q Which one of the following is not a main building block of
an operational risk framework?
a. Loss data collection.
A
b. Risk and control self-assessment.
c. Compliance document preparation.
d. Scenario analysis.
Review Question 4: Operational Risk Chapter 1
Q According to the principles of the Basel II Accord, the
implementation of an operational risk management
framework in a financial institution depends on?
a. Its credit conditions, sector and market conditions, and
A
business drivers.
b. Its capital, legal status, regulatory drivers, and business
conditions.
c. Its compliance framework, market conditions, and
business drivers.
d. Its culture, regulatory drivers and best practice in the
industry.
Review Question 4: Operational Risk Chapter 1 Answer
Q According to the principles of the Basel II Accord, the
implementation of an operational risk management
framework in a financial institution depends on?
a. Its credit conditions, sector and market conditions, and
A
business drivers.
b. Its capital, legal status, regulatory drivers, and business
conditions.
c. Its compliance framework, market conditions, and
business drivers.
d. Its culture, regulatory drivers and best practice in the
industry.
Review Question 5: Operational Risk Chapter 1
Q Which one of the following is not a critical quality of an
upward reporting operational risk function?
a. Independence.
A
b. Importance.
c. Relevance.
d. Security.
Review Question 5: Operational Risk Chapter 1 Answer
Q Which one of the following is not a critical quality of an
upward reporting operational risk function?
a. Independence.
A
b. Importance.
c. Relevance.
d. Security.
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