Practice Question Set: Chapter 4. Risk Measurement and Assessment

Chapter 4. Risk Measurement and Assessment Practice Question Set contains 8 pages covering the following learning objective:

Explain best practices for the collection of operational loss data and reporting of operational loss incidents, including regulatory expectations.

Explain operational risk-assessment processes and tools, including risk control self-assessments (RCSAs), likelihood assessment scales, and heatmaps.

Describe the differences among key risk indicators (KRIs), key performance indicators (KPIs), and key control indicators (KCIs).

Describe the use of factor-based models that quantitatively assess operational risk, and explain the application of the Swiss cheese model and the bowtie tool.

Estimate operational risk exposures based on the fault tree model given probability assumptions.

Describe approaches used to determine the level of operational risk capital for economic capital purposes, including their application and limitations.

Describe and explain the steps to ensure a strong level of operational resilience, and to test the operational resilience of important business services.

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