1.) The discipline of operational risk management emerged from ...

Select one:

a.reporting.

b.hazards.

c.risk and control assessment.

d.indicators.

2.) Loss of one or more key staff, loss of reputation or abandoning a project has an adverse impact on the ... of an organisation.

Select one:

a.key strategic alliances

b.employee retention

c.physical assets

d.finances

3.) The OECD Principles of Corporate Governance state that a risk policy ...

Select one:

a. is the culture of and processes involved in identifying strategic opportunities and reducing uncertainty.

b. gives assurance on the business operations and oversight.

c. is linked to the corporate strategy, and specifies the types and degree of risk that a company is willing to accept in pursuit of its objectives.

d. is the first line of defence to establish an appropriate risk and control environment.

4.) The definition of operational risk most widely used in ... is the one published by the Basel Committee on Banking Supervision.

Select one:

a.computer failure

b.financial services

c.political risk

d.loss of reputation

5.) Which ONE of the following events did NOT occur as a result of the collapse of Barings Bank?

Select one:

a.Substantial bank lending losses

b.$1,3 billion of debts

c.Insolvency and administration of the bank

d.Inadequate governance structures

6.) Learning from previous operational risk problems is a fundamental part of operational risk ...

Select one:

a.data collection.

b.data analysis.

c.effects analysis.

d.event analysis.

7.) Which of the following statements do not clarify operational risk governance based on developing an effective and consistent operational risk management framework?

i) The operational risk policy of the firm ensures that the board-approved risk appetite is aligned with its business policy and objectives.

ii) The internal control system or the internal control and monitoring system of a bank is a continuous process involving the board of directors, senior management and all levels of personnel.

iii) The operational risk management framework provides the strategic direction and guidelines on operational risk in order to ensure that an effective operational risk management and measurement process remains approved.

iv) Risk and control ownership and accountability reduce oversight and the duplication of effort.

v) A risk management framework will ensure transparency regarding the risks of the organisation, which in turn allows informed business decision-making.

Choose the correct combination.

Select one:

a.

i, ii, iv

b.

i, ii, iii, iv, v

c.

ii, iii, v

d.

i, iii, iv, v

8.) Which of the following form part of the rigor of the Six Sigma approach?

i) Access current state.

ii) Agree to be improved.

iii) Investigate root cause.

iv) Develop solutions.

v) Test solutions.

vi) Design and implement improvement.

vii) Review learning.

viii) Identify next improvement.

Choose the correct combination.

Select one:

a.

i, iv, v, vi, vii

b.

i, ii, iii, v, vi, vii

c.

i, ii, iii, iv, v, vi, viii

d.

ii, iii, iv, v

9.) Comprehensive and consistent capturing of ... will aid loss causal analysis by providing a reliable set of data from which to draw tentative conclusions.

Select one:

a.risks and indicators

b.indicators and scenarios

c.events and losses

d.risks and controls

10.) Choose the correct statement.

Select one:

a.Financial risks and non-financial risks are the same.

b.Operational risk can be easily cascaded down from the board level.

c.It is common for a board to say that it has no appetite for operational risk.

d.Stakeholders have similar levels of appetite for the same operational risks.

11.) Clear operational risk governance is the basis for developing an effective and consistent operational risk management framework. It will ONLY clarify the operational risk policy of the firm and ensure that the board-approved risk appetite is aligned with the business policy and objectives. Indicate if the statement is true or false:

Select one:

a.

True

b.

False

12.) ... is seen as an operational risk mitigation technique that reduces operational costs and improves profitability.

Select one:

a.Outsourcing

b.Reporting

c.Risk appetite

d.Risk governance

13.) The executive operational risk committee is responsible for ...

Select one:

a.keeping the firm's internal controls and operational risk management systems under review.

b.articulating the risk and operational risk profile of the firm.

c.managing the process of setting the operational risk appetite.

d.developing quantitative and qualitative metrics for risk assessment.

14.) The board of directors is responsible for ...

Select one:

a.developing quantitative and qualitative metrics for risk assessment.

b.keeping the firm's internal controls and operational risk management systems under review.

c.articulating the risk and operational risk profile of the firm.

d.managing the process of setting the operational risk appetite.

15.) Which of the following aspects must be included in an operational risk policy?

i) A definition of operational risk

ii) A statement of operational risk appetite

iii) An overview of the operational risk management processes

iv) A statement of the roles and responsibilities of various personnel anddepartments

v) A glossary of terms

Choose the correct combination.

Select one:

a.

i, iv

b.

ii, iii, iv, v

c.

ii, iv, v

d.

i, ii, iii, iv, v

16.) ... focuses primarily on regulatory requirements.

Select one:

a.The audit committee

b.The compliance function

c.The board

d.Independent assurance

17.) The aim or purpose of good corporate governance is to establish a system that will ensure effective accountability from the board to shareholders and other stakeholders.

Select one:

a. True

b. False

18.) The compliance function is responsible for ...

Select one:

a.articulating the risk and operational risk profile of the firm.

b.liaising with the internal audit department.

c.all communication and responses to appropriate regulators.

d.keeping the firm's internal controls and operational risk management systems under review.

19.) The "three lines of defence" model explicitly recognises the primary role of the ... in managing the risk in a firm.

Select one:

a.risk committee

b.business line

c.chief risk officer

d.audit committee

20.) Control appetite consists of governance appetite; preventative control appetite; effects appetite and detective control appetite.

Select one:

a. True

b. False

21.) Which statement best describes operational risk appetite?

Select one:

a. The amount of risk an organisation is not willing to take in order to achieve its strategic objectives over a given period.

b. The amount of risk an organisation is not willing to take because they have an appetite for achieving strategic objectives over a given period.

c. The amount of risk an organisation is willing to take in order to comply with regulations.

d. The amount of risk an organisation is willing to take in order to achieve its strategic objectives over a given period.

22.) The amount a firm is willing to spend to mitigate a risk to an acceptable residual level is known as ...

Select one:

a. regulatory capital.

b. control appetite.

c. control indicators.

d. risk tolerance.

23.) Operational risks can be managed successfully by following a proactive approach that involves...

Select one:

a. recovering the loss and attempting to link the cause to that loss.

b. outsourcing the key business of the organisation.

c. identifying the risks to which the organisation is exposed.

d. linking potential events to their causes.

24.) Which of the following is not an example of an operational risk arising from an external event?

Select one:

a.Changes in the regulatory system.

b.Hacking from another company.

c.Unqualified staff complement.

d.Hail storm destroying maise crops.

25.) Product risk involves the credit risk of the supplier and buyer, but it is rooted in the operational risks of supply chain logistics.

Select one:

a.False

b.True

*Please read the questions carefully and answer very accurately.*