MULTIPLE CHOICE QUESTIONS

Select the correct answer from the options available.

In the provided answer book, write down the question number and the letter of the correct answer next to it$.$

For example, $1\mathrm{.}1$ D

Each question is worth two $(2)$ marks.

QUESTION $3(20$ Marks$)$

$3\mathrm{.}1$ Which of the following best describes the concept of risk in a business context? $(2)$ A$.$

B$..$ C$.$

D$.$

$3\mathrm{.}2$ Which of the following examples best illustrates an operational risk event? $(2)$ A$.$

B$.$ C$.$ D$.$

$3\mathrm{.}3$ Which of the following statements best explains the role of a risk management $(2)$ committee within an operational risk management framework?

A$.$

B$.$

C$.$ D$.$

$3\mathrm{.}4$ Why is it essential to have a documented risk management process in the $(2)$ development of an operational risk management function?

A$.$

B$.$

C$.$ D$.$

$3\mathrm{.}5$ Which of the following is a key challenge in developing an effective operational risk $(2)$ management function?

The likelihood of regulatory compliance issues.

The possibility of only positive outcomes affecting the organization

The possibility of both positive and negative outcomes affecting the

organization.

The certainty of negative outcomes affecting the organization.

Fluctuations in foreign exchange rates affecting profit margins.

A significant increase in the cost of raw materials.

A data breach exposing sensitive customer information.

A competitor launching a more innovative product.

To handle all external communications and public relations.

To provide oversight, set risk policies, and ensure the effectiveness of the risk

management process.

To perform technical tasks related to risk data analysis.

To execute day$-$to$-$day business operations.

To satisfy external auditors without affecting internal practices.

To ensure transparency, consistency, and accountability in risk management

practices.

To provide a reference that can be ignored once the process is established.

To reduce the need for risk communication within the organization.

ORM Damelin$$

A$.$ Overemphasis on strategic risk management

Exam Page $5$ of $7$

Resistance to change and lack of risk awareness among employees.

B$.$ C$.$ D$.$

$3\mathrm{.}6$ In the context of operational risk identification, what is the primary advantage of using $(2)$ scenario analysis?

A$.$ B$.$ C$.$

D$.$

$3\mathrm{.}7$ In the context of operational risk identification, what is the primary advantage of using $(2)$ scenario analysis?

A$.$ B$.$ C$.$

D$.$

$3\mathrm{.}8$ During operational risk evaluation, why is it critical to assess both quantitative and $(2)$ qualitative data?

A$.$ B$.$

C$.$ D$.$

$3\mathrm{.}9$ What is the main benefit of conducting regular stress testing on operational risk $(2)$ controls?

A$.$ B$.$ C$.$ D$.$

$3\mathrm{.}10$ Which of the following technologies can enhance the effectiveness of operational risk $(2)$ monitoring by identifying patterns and anomalies?

Excessive focus on external risk factors.

Lack of adequate technology solutions

It eliminates the need for qualitative risk assessments.

It provides exact predictions of future risk events.

It helps to understand the impact of potential high$-$severity, low$-$likelihood

events.

It simplifies the risk identification process by focusing on past incidents.

It eliminates the need for qualitative risk assessments.

It provides exact predictions of future risk events.

It helps to understand the impact of potential high$-$severity, low$-$likelihood

events.

It simplifies the risk identification process by focusing on past incidents.

To focus exclusively on numerical risk scores.

To gain a comprehensive understanding of risks from both measurable and

subjective perspectives.

To reduce the complexity of the risk evaluation process.

To prioritize qualitative data over quantitative data.

To identify and document historical risk events.

To assess the effectiveness of controls under extreme but plausible conditions.

To ensure that controls comply with all regulatory requirements.

To eliminate the need for routine risk assessments.

A$.$ B$.$ C$.$ D$.$

Manual data entry systems.

Machine learning and artificial intelligence. Traditional filing systems.

Basic spreadsheet software.