A governance, risk, and compliance strategy can help a bank to avoid:
I . Incomplete analysis of risks
II . Misperception of risk exposures
III . Duplication of effort
IV . Contradictory reporting
Normally, commercial banking can be viewed as a fixed income carry trade since
On January 1, 2010 the TED (treasury-euro dollar) spread was 0.4%, and on January 31, 2010 the TED spread is 0.9%. As a risk manager, how would you interpret this change?
When creating a model to estimate risk, it is important to recognize which one of the following?
A bank considers issuing new capital to increase its Tier 1 capital levels. Which of the following financial instruments would most likely to be considered?
An endowment asset manager with a focus on long/short equity strategies is evaluating the risks of an equity portfolio. Which of the following risk types does the asset manager need to consider when evaluating her diversified equity portfolio?
I . Company-specific projected earnings and earnings risk
II . Aggregate earnings expectations
III . Market liquidity
IV . Individual asset volatility
The mark-to-market process includes which one of the following activities?
Which one of the four following statements about Basis point values is correct?
Basis point value:
Which of the following correctly identifies reasons for collecting internal operational risk event and loss information?
I . Assessing the risk of specific areas of concern.
II . Evaluating risk events and outcomes.
III . Collecting data for capital modeling.
IV . Getting insight into risk events in other firms in the industry.
The Basel II Accord's operational risk definition excludes all of the following items EXCEPT:
For which one of the following four reasons do corporate customers use foreign exchange derivatives?
I . To lock in the current value of foreign-denominated receivables
II . To lock in the current value of foreign-denominated payables
III . To lock in the value of expected future foreign-denominated receivables
IV . To lock in the value of expected future foreign-denominated payables
DeltaFin wants to develop a control scoring method for its RCSA program. Which of the following statements regarding scoring methods are correct?
I . DeltaFin can develop a control scoring method that assesses both the design and the performance of the control.
II . DeltaFin can combine the design and performance scores for each control to produce an overall control effectiveness score.
III . DeltaFin can use the control performance scores to compute an overall risk severity score.
IV . DeltaFin can determine its own appropriate control scoring method.
To improve the culture and awareness of the operational risk, Gamma Bank's CRO decides to promote three activities within her organization. Which one of the following four activities is NOT typically used to develop an operational risk framework?
Gamma Bank estimates its monthly portfolio volatility at 5%.The portfolio's annual volatility is closest to which of the following?
A risk manager has a long forward position of USD 1 million but the option portfolio decreases JPY 0.50 for every JPY 1 increase in his forward position. At first approximation, what is the overall result of the options positions?
