Chapter 1: Focus Areas Flashcards
Risk definition?
Correct definition: Risk is defined as “the effect of uncertainty on objectives.”
What isn’t included in the Basel operational risk types?
Correct definition: Risk is defined as “the effect of uncertainty on objectives.”
What approach is more typical to firms new to risk management?
Bottom up
What are the four types of risk management controls?
preventative
detective
corrective
directive
What is Scenario Analysis essential for?
Calculating regulatory capital
Managing high severity low frequency risks
What are the steps of scenario analysis?
Preparation and governance
Generation and selection
Assessment
Validation
Incorporation
Aggregation
Incorporation into capital
What kind of risk management focuses on alignment with strategy and business goals
Risk definition
