Multiple Choice Questions: Briefly explain the reasoning for your choice which is mandatory. Answer all of the following (2) to (21) - Each MCQ carries one mark.

(1)While uncertainty means the existence of more than one possibility, risk is a state of uncertainty where some of the possibilities may involve an undesirable outcome. Whichone of the following statements correctly describes the above statement?

(A)One may have uncertainty without risk but risk without certainty.

(B)One may have uncertainty without risk but risk without uncertainty.

(C)One may have uncertainty without risk but not risk without certainty.

(D)One may have uncertainty without risk but not risk without uncertainty.

In respect of an organization, Reputation risk means

(E)Risk of possible financial loss to the organization.

(F)Risk of a failure which may lead to violation of the regulatory requirements that the organization is supposed to comply with.

(G)Risk of the organization's reputation in public view which is a key concern in engaged media and social media.

(H)None of the above.

(2)The Probability is that Event A occurs, given that Event B has occurred. The conditional probability of Event A, given Event B, is denoted by:

(A)P(A?B)

(B)P(B?A)

(C)P(A)+ P(B)

(D)None of the above.

(3)If the risk manager concludes that a company's strategy is less effective inthe market, then the company is said to face strategic risks. All of the following would be factor for such strategic risk, EXCEPT

(A)Shifts in customer demand

(B)Increase in interest rates

(C)A global entity entering the market

(D)Technological changes

(1)Which one is an external factor in respect of risks for an insurance company?

(A)Financial position

(B)Machine failure

(C)Staff Morale

(D)Earthquake

(2)If Risk rating is 5, then the risk is called

(A)Severe

(B)High

(C)Moderate

(D)Low

(3)If Corr (X, Y) =-1, then X and Y have

(A)Perfectpositive correlation

(B)No correlation

(C)Perfect negative correlation

(D)None of the above.

(4)Which of the following statements is NOT true with respect to Risk Management?

(A)Risk management is as much about identifying opportunities as avoiding or mitigating losses.

(B)Risk management can be described as 'coordinated activities to direct and control an organization'

(C)Risk management is an essential business activity for enterprises of all sizes.

(D)Risk management is recognized as an integral component of good management and governance.

(5)Code of conduct for employees would most likely be contained in which type of Operational Risk Management Policy?

(A)Departmental Policies

(B)High-Level Policies

(C)Human Resource Polices

(D)Operational Policies

(6)In respect of an enterprise, Knowledge risks are associated with

(A)Management and protection of knowledge and information within the enterprise.

(B)Primary long-term purpose, objectives and direction of the business

(1)OECD has developed set of principles for better corporate governance. The principle of Disclosures and Transparency would NOT include :

(A)Overseeing the process of disclosure and communications

(B)Foreseeable risk factors

(C)The financial and operating results of the company

(D)Company Objectives and non-financial information

(2)RAROC is

(A)Return on capital adjusted for inflation.

(B)Risk-based profitability measurement framework.

(C)Return on gilts

(D)None of the above

(3)In respect of an exposure, Loss Given Default [LGD] refers to

(A)The actual amount of loss

(B)The amount that is exposed to the default risk

(C)The loss likely to be suffered in the event of a default occurring in the exposure.

(D)None of the above

(4)Gini coefficient is

(A)One of the most popular index to gauge the rich-n-poor income-that is to measure inequality in income distribution.

(B)An index to measure the level of corruption perception.

(C)An index to measure the level of crimes, violence and military expenditure.

(D)None of the above

(5)Enterprise risk governance framework would NOT normally include

(A)Risk Limits

(B)Risk Management Procedures

(C)Risk Appetite Framework

(D)Risk Appetite Statement