The data available to estimate the statistical distribution of bank losses is difficult to assemble for which of the
following reasons?
I. The needed data is vast in quantity.
II. The data requires bringing together significantly different measures of risk.
III. Some risks are difficult to quantify and hence the data might involve subjective elements.

• A.I, II, III
• B.I, III
• C.I, II
• D.II, III

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The main building blocks of an operational risk framework include all of the following options EXCEPT:

• A.Loss data collection
• B.Compliance document preparation
• C.Risk and control self-assessment
• D.Scenario analysis

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Which one of the following four statements about hedging is INCORRECT?

• A.A large number of hedge positions is generally required to match the underlying transaction completely.
• B.For a fully hedged portfolio, any changes in markets prices will typically produce significant changes in
  the market value of the portfolio.
• C.Traders can hedge their risks by taking an appropriate position in the underlying instrument.
• D.Traders can hedge their portfolio risks by taking a position in a different instrument.

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Which of the following factors are typically included in standard operational risk definitions?
I. Human errors
II. Process failure
III. Systems failure
IV. Unexpected events

• A.I, II and III
• B.I and II
• C.I and IV
• D.II and III

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Which of the following statements about implementation of a successful RCSA program is correct?

• A.Internal loss data help to identify the risks and control weaknesses that need to be addressed in the
  RCSA; external events are not helpful in informing the discussions around potential risks.
• B.The RCSA scoring methodology should include only financial impacts and not include reputational,
  legal, regulatory, client and life safety impacts.
• C.An RCSA is only complete after all possible mitigating actions have been identified and analyzed as a
  result of the assessment process.
• D.To ensure that the RCSA is well designed, it is important to interview participants, stakeholders and
  support functions prior to the launching the RCSA.

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