Chapter 4. Risk Measurement and Assessment Study Notes contains 16 pages covering the following learning objectives:
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 and distinguish between the different quantitative approaches and models used to analyze operational risk.
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.
After reviewing the notes, you will be able to apply what you learned with practice questions and answers.
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