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ARM 402 Segment C – Questions & Accurate Answers
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ARM 402 Segment C – Questions & Accurate Answers
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ARM 402 Segment C – Questions & Accurate AnswersAny possibility of loss arising from people, processes, systems, or external
events. Right Ans - operational risk
The amount of risk a company is willing to accept to achieve its goals and
objectives. To avoid undue risk, risk appetite must be in alignment with
company strategy. Right Ans - risk appetite
Amount of uncertainty an organization is willing to pursue or to accept to
attain its risk management goals. Right Ans - risk tolerance
- people
- process
- systems
- external events Right Ans - What are the four key operational
classifications?
systems or process that an organization uses to achieve its operational goals,
internal and external financial reporting goals or legal and regulatory goals
Right Ans - internal controls
A system of specified standards or objectives against which an organization's
management measures performance. Right Ans - management controls
The degree of importance a board of directors and management place on their
organization's internal control system and their related actions. Right Ans -
control environment
they are constantly identified, assessed, controlled, and monitored in an
endless loop Right Ans - How are operational risk managed?
- approval & authorizations (preventive)
- reconciliations (detective)
- segregation of duties (preventive)
- safeguarding assets (preventive and detectives) Right Ans - Common
controls include what?
, an approach to project planning and execution in which portions of the
project are divided by requirements or problem statements and addresses
seperately but in a way that will integrate Right Ans - framework
the fraudulent practice of sending emails purporting to be from reputable
companies in order to induce individuals to reveal personal information, such
as passwords and credit card numbers. Right Ans - phishing
- security
- availability
- performance
- compliance Right Ans - IT operational risk are categorized as
capital markets Right Ans - When traditional insurance or reinsurance is
not able to meet a business needs what is another alternative
A financial market in which long-term securities are traded. Right Ans -
capital markets
A financial instrument whose value is primarily driven by insurance and/or
reinsurance loss events. Right Ans - insurance linked securities
- the organization transferring risk
- the investors who take on risk
- the special purpose vehicle (SPV) Right Ans - What are the three actors of
insurance securitization
A facility established for the purpose of purchasing income-producing assets
from an organization, holding title to them, and then using those assets to
collateralize securities that will be sold to investors. Right Ans - special
purpose vehicle
A financial contract that derives its value from the value of another asset.
Right Ans - derivative
- forward/future contracts
- options
- swaps Right Ans - What are the three categories of derivatives in financial
risk management are?
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