Preview Questions Risk Assessment Analyst | Role Specific Skill

Question 1: In assessing operational risk in financial institutions, how would you handle extreme value theory (EVT)?

Which action should you take?

Choose only one option

By using EVT to exclude outliers from the analysis

By incorporating EVT into the decision tree model to predict operational failures

By applying EVT to model the tails of the risk distribution to account for rare, extreme events

By using EVT to assess the median value of operational losses

Question 2: When preparing a report for a risk audit, which of the following is most critical?

Which action should you take?

Choose only one option

Focusing on presenting only the most recent data

Limiting the discussion to the risk-related outcomes without including any background information

Ensuring that all data is transparent, well-documented, and traceable back to the original sources

Ensuring the report is as brief as possible

Question 3: In a report on operational risk, what is the best way to document incidents of non-compliance in a financial institution?

Which action should you take?

Choose only one option

Detailing the incident with its impact, root cause, and corrective actions taken

Documenting incidents in a generic manner without specifics

Focusing only on the financial impact without addressing operational processes

Just listing the incident without its root cause or solution

Question 4: In the context of operational risk, which of the following is an example of a preventive risk mitigation strategy?

Which action should you take?

Choose only one option

Increasing the capital reserves to cover potential operational losses

Implementing internal controls to prevent fraud and system errors

Diversifying investments across multiple high-risk sectors

Allowing greater flexibility in operational procedures to handle more risk

Question 5: What is the primary goal of using insurance as a risk mitigation strategy in a financial institution?

Which action should you take?

Choose only one option

To reduce credit risk exposure

To protect against operational risk losses

To increase capital adequacy ratios

To hedge against interest rate risk

Question 6: Which regulatory body is most likely to enforce compliance in the financial services industry?

Which action should you take?

Choose only one option

Federal Reserve

International Monetary Fund (IMF)

World Bank

Financial Conduct Authority (FCA)