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Question 1 of 296
1. Question
ABC Investment Bank is analyzing a large dataset of financial data and is concerned about the impact of high dimensions on their analysis. What is the primary benefit of using non-parametric methods in this situation?
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Question 2 of 296
2. Question
XYZ Hedge Fund is interested in estimating their Value at Risk (VaR) using a non-parametric approach. What is one potential drawback of this approach?
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Question 3 of 296
3. Question
PQR Asset Management has implemented a non-parametric method for estimating portfolio risk but has noticed that the model tends to overestimate risk in certain situations. What type of backtesting should PQR perform on this model?
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Question 4 of 296
4. Question
LMN Investment Company is interested in using a non-parametric approach to analyze a large dataset of financial data but is concerned about the impact of outliers on their analysis. What is one potential benefit of using a non-parametric approach in this situation?
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Question 5 of 296
5. Question
ABC Bank is interested in implementing a VaR mapping approach to measure its market risk exposure. What is the primary benefit of this approach?
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Question 6 of 296
6. Question
XYZ Hedge Fund has implemented a VaR mapping approach to measure its market risk exposure. During a recent stress test, it was found that the model was not capturing all of the relevant risk factors. What is the most appropriate action for XYZ to take?
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Question 7 of 296
7. Question
PQR Insurance Company has implemented a VaR mapping approach but is concerned about potential model errors or biases. What type of backtesting should PQR perform on this model?
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Question 8 of 296
8. Question
LMN Asset Management is interested in using a VaR mapping approach to measure its market risk exposure but is concerned about the complexity of the model. What is one potential drawback of this approach?
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Question 9 of 296
9. Question
ABC Bank has implemented a VaR model to measure its market risk exposure. What is the primary purpose of backtesting this model?
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Question 10 of 296
10. Question
XYZ Hedge Fund has been using a VaR model to manage its portfolio risk for several years. During a recent backtesting exercise, it was found that the actual losses exceeded the expected losses by a significant margin. What type of error does this represent?
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Question 11 of 296
11. Question
PQR Insurance Company has developed an internal VaR model to measure its market risk exposure. As part of its regulatory compliance requirements, it must perform backtesting on this model. What is one significant difficulty in backtesting a VaR model?
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Question 12 of 296
12. Question
LMN Asset Management has implemented a new VaR model to measure its market risk exposure. During initial testing, it was found that the model was not capturing all of the relevant risk factors. What is the most appropriate action for LMN to take?
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Question 13 of 296
13. Question
DEF Bank is interested in implementing a risk management strategy for their trading book. What is the primary message from the academic literature regarding risk management for trading books?
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Question 14 of 296
14. Question
GHI Investment Company is considering using non-parametric methods to estimate financial risk measures. What is one potential benefit of using non-parametric methods, according to the academic literature?
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Question 15 of 296
15. Question
JKL Asset Management has implemented a VaR mapping approach for estimating portfolio risk but has noticed that it requires a more detailed understanding of nonlinear relationships between different risk factors. What type of backtesting should JKL perform on this approach?
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Question 16 of 296
16. Question
MNO Bank is interested in implementing a risk management strategy for their trading book but is concerned about the complexity of non-parametric methods. What is one potential drawback of using non-parametric methods, according to the academic literature?
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Question 17 of 296
17. Question
ABC Investment Company is interested in analyzing the relationship between two variables. What is the definition of covariance?
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Question 18 of 296
18. Question
DEF Bank is interested in understanding the relationship between two stocks in their portfolio. What is the primary message from the academic literature regarding correlation?
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Question 19 of 296
19. Question
GHI Investment Company has noticed that their portfolio’s covariance is zero. What does this tell them about the relationship between these variables?
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Question 20 of 296
20. Question
JKL Asset Management wants to calculate correlation coefficients for several pairs of stocks in their portfolio. What does a correlation coefficient value of -1 indicate?
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Question 21 of 296
21. Question
ABC Investment Company is analyzing the behavior of correlations during a recession. What does the academic literature suggest about correlations during a recession?
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Question 22 of 296
22. Question
DEF Bank is interested in understanding how macroeconomic factors affect correlations between stocks. What is the primary message from the academic literature regarding macroeconomic factors and correlations?
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Question 23 of 296
23. Question
GHI Investment Company has noticed that two variables have a strong positive correlation. What does this tell them about the relationship between these variables?
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Question 24 of 296
24. Question
JKL Asset Management wants to analyze how different sectors in their portfolio are correlated with each other. What statistical measure should they use?
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Question 25 of 296
25. Question
ABC Investment Company is interested in modeling the joint default probability of two companies. What statistical measure should they use?
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Question 26 of 296
26. Question
DEF Bank is interested in modeling the default correlation between two companies using a Gaussian distribution. What does a default correlation of 0.4 indicate?
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Question 27 of 296
27. Question
GHI Investment Company wants to calculate the joint default probability of three companies using a bottom-up approach. What statistical measure should they use?
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Question 28 of 296
28. Question
JKL Asset Management wants to analyze how different sectors in their portfolio are correlated with each other using a bottom-up approach. What statistical measure should they use?
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Question 29 of 296
29. Question
ABC Investment Company is interested in using a historical simulation approach to estimate Value at Risk (VaR). What does this approach involve?
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Question 30 of 296
30. Question
DEF Bank is interested in using a Monte Carlo simulation approach to estimate VaR. What does this approach involve?
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Question 31 of 296
31. Question
GHI Investment Company wants to hedge against interest rate risk using futures contracts. What type of futures contract should they use?
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Question 32 of 296
32. Question
JKL Asset Management wants to hedge against currency risk using options contracts. What type of options contract should they use?
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Question 33 of 296
33. Question
ABC Investment Company is interested in modeling the term structure of interest rates using a one-factor model. What does this model assume?
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Question 34 of 296
34. Question
DEF Bank wants to estimate the yield curve using a Nelson-Siegel model. What does this model involve?
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Question 35 of 296
35. Question
GHI Investment Company wants to estimate forward rates using the spot rate curve. What formula should they use?
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Question 36 of 296
36. Question
JKL Asset Management wants to compare two bonds with different maturities and coupons. Which measure should they use?
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Question 37 of 296
37. Question
ABC Investment Company expects that short-term interest rates will increase in the future. What shape of the term structure is likely to result?
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Question 38 of 296
38. Question
DEF Bank expects that short-term interest rates will decrease in the future. What shape of the term structure is likely to result?
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Question 39 of 296
39. Question
GHI Investment Company observes that long-term interest rates are higher than short-term interest rates. What shape of the term structure is this?
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Question 40 of 296
40. Question
JKL Asset Management observes that short-term interest rates are higher than long-term interest rates. What shape of the term structure is this?
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Question 41 of 296
41. Question
ABC Investment Company is modeling the term structure of interest rates using a simple model with no drift. What does this model assume?
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Question 42 of 296
42. Question
DEF Bank is modeling the term structure of interest rates using a model with a constant drift. What does this model assume?
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Question 43 of 296
43. Question
GHI Investment Company is modeling the term structure of interest rates using a model with time-deterministic shift. What does this model involve?
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Question 44 of 296
44. Question
JKL Asset Management is modeling the term structure of interest rates using a mean-reverting drift. What does this model assume?
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Question 45 of 296
45. Question
ABC Investment Company is modeling the term structure of interest rates using a model with normally distributed rates. What does this model assume?
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Question 46 of 296
46. Question
DEF Bank is modeling the term structure of interest rates using a model with alternate specifications of drift. What is the purpose of these alternate specifications?
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Question 47 of 296
47. Question
GHI Investment Company is modeling the term structure of interest rates using a model that allows for changes in volatility over time. What does this involve?
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Question 48 of 296
48. Question
JKL Asset Management is modeling the term structure of interest rates using a model that accounts for non-normal distributions. What does this involve?
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Question 49 of 296
49. Question
ABC Investment Company is analyzing the volatility smile for a particular stock option. What does the volatility smile represent?
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Question 50 of 296
50. Question
DEF Bank is analyzing the shape of a particular stock option’s volatility smile. What does a downward sloping smile indicate?
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Question 51 of 296
51. Question
GHI Investment Company is comparing two stock options with different maturities. How might their respective volatility smiles differ?
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Question 52 of 296
52. Question
JKL Asset Management is analyzing a stock with high skewness and kurtosis. How might this affect its corresponding volatility smile?
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Question 53 of 296
53. Question
ABC Investment Company is a bank subject to the Fundamental Review of Trading Book. What is the purpose of this review?
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Question 54 of 296
54. Question
DEF Bank is analyzing its trading book and determining which assets are subject to market risk. Which assets are typically included in a bank’s trading book?
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Question 55 of 296
55. Question
GHI Investment Company is reviewing its internal models for calculating market risk under the Fundamental Review of Trading Book. What is one requirement for these models?
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Question 56 of 296
56. Question
JKL Asset Management is reviewing its compliance with the final version of Minimum Capital Requirements for Market Risk published by Basel Committee on Banking Supervision in January 2016. What does this publication specify?
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Question 57 of 296
57. Question
What is the primary objective of credit analysis?
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Question 58 of 296
58. Question
Which of the following is NOT a factor that should be considered when assessing a borrower’s character?
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Question 59 of 296
59. Question
Which of the following is an example of a qualitative factor that should be considered when assessing a borrower’s capacity to repay debt?
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Question 60 of 296
60. Question
What is the purpose of conducting a sensitivity analysis in credit analysis?
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Question 61 of 296
61. Question
Which of the following is NOT one of the “Five Cs” used to evaluate creditworthiness?
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Question 62 of 296
62. Question
Which of the following is NOT a typical responsibility of a credit analyst?
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Question 63 of 296
63. Question
What is the primary difference between a corporate credit analyst and a commercial real estate credit analyst?
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Question 64 of 296
64. Question
Which type of credit analysis involves analyzing complex financing structures such as securitizations?
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Question 65 of 296
65. Question
Which of the following is NOT a typical skill required for a credit analyst?
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Question 66 of 296
66. Question
What is the primary goal of credit analysis?
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Question 67 of 296
67. Question
What is a quantitative model used for in credit analysis?
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Question 68 of 296
68. Question
What is one potential drawback of relying solely on statistical-based models for credit analysis?
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Question 69 of 296
69. Question
What is the primary goal of rating assignment methodologies?
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Question 70 of 296
70. Question
Which of the following is NOT a factor that can influence credit ratings?
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Question 71 of 296
71. Question
What is one way to avoid lenders’ irresponsibility when assigning credit ratings?
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Question 72 of 296
72. Question
Which of the following is NOT one of the “Five Cs” used to evaluate creditworthiness?
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Question 73 of 296
73. Question
What is a credit default swap (CDS)?
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Question 74 of 296
74. Question
What is a first-to-default put?
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Question 75 of 296
75. Question
What is a total return swap (TRS)?
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Question 76 of 296
76. Question
What is a credit-linked note (CLN)?
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Question 77 of 296
77. Question
What are some applications of credit derivatives?
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Question 78 of 296
78. Question
What is spread risk?
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Question 79 of 296
79. Question
What is a default intensity model?
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Question 80 of 296
80. Question
What is an implied default probability?
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Question 81 of 296
81. Question
What is a hazard rate?
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Question 82 of 296
82. Question
What is the relationship between credit spreads and default probabilities?
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Question 83 of 296
83. Question
What is portfolio credit risk?
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Question 84 of 296
84. Question
What is a factor model?
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Question 85 of 296
85. Question
What are latent factors?
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Question 86 of 296
86. Question
What is a future time horizon?
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Question 87 of 296
87. Question
What is conditional independence?
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Question 88 of 296
88. Question
What are structured credit products?
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Question 89 of 296
89. Question
What is a tranche?
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Question 90 of 296
90. Question
What is collateralized debt obligation (CDO)?
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Question 91 of 296
91. Question
What is credit enhancement?
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Question 92 of 296
92. Question
What is the role of rating agencies in structured credit products?
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Question 93 of 296
93. Question
Case Study: ABC Bank enters into a credit default swap (CDS) with XYZ Corporation. The notional amount of the CDS is $10 million, and the premium is $100,000 per year. The CDS has a maturity of five years. What is the credit exposure for ABC Bank in this transaction?
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Question 94 of 296
94. Question
What is the purpose of a credit default swap?
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Question 95 of 296
95. Question
Case Study: DEF Corporation enters into an interest rate swap with GHI Bank. The notional amount of the swap is $50 million, and it has a maturity of three years. What is wrong-way risk?
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Question 96 of 296
96. Question
What is credit value adjustment (CVA)?
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Question 97 of 296
97. Question
Case Study: JKL Bank enters into a total return swap with MNO Corporation. The notional amount of the swap is $20 million, and it has a maturity of two years. What is a total return swap?
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Question 98 of 296
98. Question
What is netting?
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Question 99 of 296
99. Question
What is close-out netting?
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Question 100 of 296
100. Question
Case Study: DEF Corporation enters into a credit default swap (CDS) with GHI Bank. The notional amount of the CDS is $10 million, and the premium is $100,000 per year. The CDS has a maturity of five years. What is the purpose of collateral in a CDS transaction?
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Question 101 of 296
101. Question
What is variation margin?
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Question 102 of 296
102. Question
What is initial margin?
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Question 103 of 296
103. Question
Case Study: DEF Corporation enters into an interest rate swap with GHI Bank. The notional amount of the swap is $50 million, and it has a maturity of five years. What is settlement risk?
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Question 104 of 296
104. Question
What is delivery versus payment (DVP)?
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Question 105 of 296
105. Question
Case Study: JKL Bank enters into a credit default swap with MNO Corporation. The notional amount of the swap is $20 million, and it has a maturity of three years. What is collateralization?
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Question 106 of 296
106. Question
Case Study: ABC Corporation enters into an interest rate swap with XYZ Bank. The notional amount of the swap is $10 million, and it has a maturity of five years. What is future value?
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Question 107 of 296
107. Question
What is exposure?
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Question 108 of 296
108. Question
Case Study: DEF Bank enters into an equity swap with GHI Corporation. The notional amount of the swap is $5 million, and it has a maturity of two years. What is a fixed payment in a swap transaction?
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Question 109 of 296
109. Question
What is the difference between equal and unequal payment frequencies in a swap transaction?
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Question 110 of 296
110. Question
Case Study: JKL Bank enters into a credit default swap with MNO Corporation. The notional amount of the swap is $20 million, and it has a maturity of three years. What is collateralization?
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Question 111 of 296
111. Question
What is operational risk?
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Question 112 of 296
112. Question
Which of the following is NOT one of the seven Basel II event risk categories?
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Question 113 of 296
113. Question
What is the purpose of an operational risk management framework?
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Question 114 of 296
114. Question
What are some challenges that can arise in managing operational risk?
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Question 115 of 296
115. Question
What is operational resilience?
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Question 116 of 296
116. Question
What is the difference between inherent risk and residual risk?
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Question 117 of 296
117. Question
What are some examples of internal factors that can contribute to operational risks?
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Question 118 of 296
118. Question
What are some examples of external factors that can contribute to operational risks?
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Question 119 of 296
119. Question
What is a key challenge in assessing operational risks?
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Question 120 of 296
120. Question
What is a control self-assessment (CSA)?
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Question 121 of 296
121. Question
What is the purpose of a risk and control self-assessment (RCSA)?
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Question 122 of 296
122. Question
What are some benefits of using a risk and control self-assessment (RCSA)?
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Question 123 of 296
123. Question
What is the difference between a key risk indicator (KRI) and a key performance indicator (KPI)?
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Question 124 of 296
124. Question
What is scenario analysis?
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Question 125 of 296
125. Question
What is the difference between a risk appetite and a risk tolerance?
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Question 126 of 296
126. Question
What is the purpose of a business impact analysis (BIA)?
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Question 127 of 296
127. Question
What are some examples of critical business functions?
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Question 128 of 296
128. Question
What is a recovery time objective (RTO)?
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Question 129 of 296
129. Question
What is the difference between recovery point objective (RPO) and recovery time objective (RTO)?
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Question 130 of 296
130. Question
What is a hot site?
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Question 131 of 296
131. Question
What is the purpose of a risk treatment plan?
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Question 132 of 296
132. Question
What are some examples of risk treatment options?
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Question 133 of 296
133. Question
What is the difference between risk avoidance and risk reduction?
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Question 134 of 296
134. Question
What is residual risk?
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Question 135 of 296
135. Question
What is the purpose of monitoring and reporting on operational risks?
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Question 136 of 296
136. Question
What are some examples of internal data sources for loss data collection?
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Question 137 of 296
137. Question
What is the difference between a lagging indicator and a leading indicator?
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Question 138 of 296
138. Question
What is the purpose of benchmarking in operational risk management?
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Question 139 of 296
139. Question
What is scenario analysis?
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Question 140 of 296
140. Question
What is the purpose of a risk control self-assessment (RCSA)?
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Question 141 of 296
141. Question
What is a likelihood assessment scale?
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Question 142 of 296
142. Question
What is a heatmap?
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Question 143 of 296
143. Question
What is the difference between key risk indicators (KRIs), key performance indicators (KPIs), and key control indicators (KCIs)?
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Question 144 of 296
144. Question
What is the fault tree model?
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Question 145 of 296
145. Question
What is the purpose of a business impact analysis (BIA)?
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Question 146 of 296
146. Question
What is a recovery time objective (RTO)?
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Question 147 of 296
147. Question
What is the difference between a hot site, warm site, and cold site?
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Question 148 of 296
148. Question
What is the purpose of a crisis management plan?
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Question 149 of 296
149. Question
What is the purpose of a crisis communication plan?
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Question 150 of 296
150. Question
What is the purpose of a risk mitigation plan?
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Question 151 of 296
151. Question
What is the difference between a control objective and a control activity?
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Question 152 of 296
152. Question
What is the purpose of a key risk indicator (KRI)?
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Question 153 of 296
153. Question
What is the difference between inherent risk and residual risk?
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Question 154 of 296
154. Question
What is the purpose of a loss event database?
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Question 155 of 296
155. Question
What is the purpose of a scenario analysis?
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Question 156 of 296
156. Question
What is the difference between a risk appetite statement and a risk tolerance statement?
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Question 157 of 296
157. Question
What is the purpose of a control self-assessment (CSA)?
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Question 158 of 296
158. Question
What is the difference between internal loss data and external loss data?
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Question 159 of 296
159. Question
What is the purpose of a risk register?
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Question 160 of 296
160. Question
What is the purpose of a business continuity plan (BCP)?
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Question 161 of 296
161. Question
What is the difference between a crisis management plan and a business continuity plan?
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Question 162 of 296
162. Question
What is the purpose of an incident response team?
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Question 163 of 296
163. Question
What is meant by “recovery time objective” (RTO)?
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Question 164 of 296
164. Question
What is the purpose of a crisis communication plan?
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Question 165 of 296
165. Question
What is the purpose of a risk control self-assessment (RCSA)?
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Question 166 of 296
166. Question
What is meant by “key risk indicators” (KRIs)?
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Question 167 of 296
167. Question
What is meant by “loss distribution approach” (LDA)?
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Question 168 of 296
168. Question
What is meant by “risk culture”?
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Question 169 of 296
169. Question
What is meant by “risk appetite”?
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Question 170 of 296
170. Question
What is meant by “operational risk scenario analysis”?
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Question 171 of 296
171. Question
What is meant by “operational risk capital”?
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Question 172 of 296
172. Question
What is meant by “operational risk appetite”?
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Question 173 of 296
173. Question
What is meant by “operational risk management framework”?
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Question 174 of 296
174. Question
What is meant by “operational risk scenario analysis”?
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Question 175 of 296
175. Question
What is meant by “business continuity management” (BCM)?
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Question 176 of 296
176. Question
What is meant by “business impact analysis” (BIA)?
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Question 177 of 296
177. Question
What is meant by “recovery time objective” (RTO)?
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Question 178 of 296
178. Question
What is meant by “crisis management plan”?
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Question 179 of 296
179. Question
What is meant by “alternate site”?
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Question 180 of 296
180. Question
What is meant by “cybersecurity”?
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Question 181 of 296
181. Question
What is meant by “vulnerability assessment”?
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Question 182 of 296
182. Question
What is meant by “penetration testing”?
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Question 183 of 296
183. Question
What is meant by “firewall”?
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Question 184 of 296
184. Question
What is meant by “multi-factor authentication”?
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Question 185 of 296
185. Question
What is meant by “incident response plan”?
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Question 186 of 296
186. Question
What is meant by “forensic investigation”?
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Question 187 of 296
187. Question
What is meant by “chain of custody”?
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Question 188 of 296
188. Question
What is meant by “e-discovery”?
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Question 189 of 296
189. Question
What is meant by “business continuity management”?
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Question 190 of 296
190. Question
What is meant by “risk appetite”?
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Question 191 of 296
191. Question
What is meant by “risk tolerance”?
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Question 192 of 296
192. Question
What is meant by “key risk indicators” (KRIs)?
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Question 193 of 296
193. Question
What is meant by “operational loss event data”?
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Question 194 of 296
194. Question
What is meant by “risk register”?
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Question 195 of 296
195. Question
What is meant by “model governance”?
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Question 196 of 296
196. Question
What is meant by “model inventory”?
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Question 197 of 296
197. Question
What is meant by “model documentation”?
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Question 198 of 296
198. Question
What is meant by “model risk management”?
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Question 199 of 296
199. Question
What is meant by “model validation report”?
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Question 200 of 296
200. Question
What is meant by “model performance monitoring”?
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Question 201 of 296
201. Question
What is meant by “model risk appetite”?
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Question 202 of 296
202. Question
What is meant by “model risk tolerance”?
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Question 203 of 296
203. Question
What is meant by “model risk assessment”?
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Question 204 of 296
204. Question
What is an intraday liquidity gap?
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Question 205 of 296
205. Question
What is the purpose of intraday liquidity monitoring?
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Question 206 of 296
206. Question
What is the role of governance in intraday liquidity risk management?
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Question 207 of 296
207. Question
What is the difference between intraday liquidity risk and overnight liquidity risk?
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Question 208 of 296
208. Question
What is the purpose of liquidity monitoring?
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Question 209 of 296
209. Question
What is the difference between static and dynamic liquidity monitoring?
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Question 210 of 296
210. Question
What is the difference between asset liquidity management and liability management?
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Question 211 of 296
211. Question
What is the role of technology in liquidity monitoring?
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Question 212 of 296
212. Question
What is a matched book in the context of dealer banks?
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Question 213 of 296
213. Question
What is proprietary trading in the context of dealer banks?
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Question 214 of 296
214. Question
What is counterparty risk in the context of dealer banks?
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Question 215 of 296
215. Question
What is the role of bid and offer terms in dealer banks’ matched books?
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Question 216 of 296
216. Question
What is the difference between client-initiated derivatives positions and proprietary trading positions?
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Question 217 of 296
217. Question
What is the purpose of a liquidity stress test?
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Question 218 of 296
218. Question
What is the difference between static and dynamic liquidity stress testing?
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Question 219 of 296
219. Question
What is the difference between a baseline scenario and an adverse scenario in a liquidity stress test?
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Question 220 of 296
220. Question
What is the role of sensitivity analysis in a liquidity stress test?
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Question 221 of 296
221. Question
What is the difference between a cash flow-based stress test and a market-based stress test?
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Question 222 of 296
222. Question
What is the purpose of liquidity risk reporting?
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Question 223 of 296
223. Question
What are some best practices for reporting a bank’s liquidity position?
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Question 224 of 296
224. Question
What is the difference between stock-based and flow-based liquidity reports?
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Question 225 of 296
225. Question
What is the role of scenario analysis in liquidity stress testing?
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Question 226 of 296
226. Question
What is the primary output of a liquidity stress test?
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Question 227 of 296
227. Question
What is the relationship between contingency funding planning and liquidity stress testing?
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Question 228 of 296
228. Question
What are the key design considerations for a sound contingency funding plan?
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Question 229 of 296
229. Question
What are the key components of a contingency funding plan?
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Question 230 of 296
230. Question
What is the purpose of governance and oversight in a contingency funding plan?
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Question 231 of 296
231. Question
What is the role of monitoring in a contingency funding plan?
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Question 232 of 296
232. Question
What is the primary objective of managing deposit services?
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Question 233 of 296
233. Question
What are some factors that influence the pricing of deposit services?
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Question 234 of 296
234. Question
What is the difference between core deposits and non-core deposits?
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Question 235 of 296
235. Question
What is the role of cross-selling in managing deposit services?
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Question 236 of 296
236. Question
What is the impact of interest rate changes on deposit services?
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Question 237 of 296
237. Question
What are some examples of nondeposit liabilities?
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Question 238 of 296
238. Question
What is the primary objective of managing nondeposit liabilities?
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Question 239 of 296
239. Question
What is the difference between wholesale funding and retail funding?
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Question 240 of 296
240. Question
What are some factors that influence the pricing of nondeposit liabilities?
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Question 241 of 296
241. Question
What is the role of diversification in managing nondeposit liabilities?
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Question 242 of 296
242. Question
What is the difference between a repo and a reverse repo?
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Question 243 of 296
243. Question
What are some factors that influence the pricing of repo transactions?
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Question 244 of 296
244. Question
What is liquidity transfer pricing (LTP)?
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Question 245 of 296
245. Question
What is the purpose of LTP?
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Question 246 of 296
246. Question
What are some factors that influence LTP?
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Question 247 of 296
247. Question
What is Principle 4 of the Basel Committee on Banking Supervision’s “Principles for Sound Liquidity Risk Management and Supervision”?
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Question 248 of 296
248. Question
How does LTP align individual business lines with the liquidity risk exposures of the bank as a whole?
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Question 249 of 296
249. Question
What is the US dollar shortage in global banking?
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Question 250 of 296
250. Question
What are some factors that contribute to the US dollar shortage?
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Question 251 of 296
251. Question
What are some consequences of the US dollar shortage?
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Question 252 of 296
252. Question
What is one policy response to address the US dollar shortage?
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Question 253 of 296
253. Question
What is the role of central banks in addressing the US dollar shortage?
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Question 254 of 296
254. Question
What is covered interest parity (CIP)?
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Question 255 of 296
255. Question
What is covered interest parity lost?
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Question 256 of 296
256. Question
What are some consequences of covered interest parity lost?
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Question 257 of 296
257. Question
What are some risks associated with arbitrage?
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Question 258 of 296
258. Question
What is the role of collateral in mitigating credit risk in FX swaps?
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Question 259 of 296
259. Question
What is asset-liability management (ALM)?
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Question 260 of 296
260. Question
What is duration?
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Question 261 of 296
261. Question
What are some techniques used in ALM to manage interest rate risk?
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Question 262 of 296
262. Question
What is gap analysis?
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Question 263 of 296
263. Question
What is scenario analysis?
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Question 264 of 296
264. Question
What is the relationship between market imperfections and illiquidity?
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Question 265 of 296
265. Question
What is unsmoothing of returns?
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Question 266 of 296
266. Question
What is an example of an illiquidity risk premium?
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Question 267 of 296
267. Question
What is the main goal of factor theory?
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Question 268 of 296
268. Question
Which of the following is NOT a factor commonly used in factor models?
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Question 269 of 296
269. Question
What is a “factor loading” in factor theory?
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Question 270 of 296
270. Question
Which of the following statements about factor models is true?
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Question 271 of 296
271. Question
What is the main advantage of using multifactor models over the capital asset pricing model (CAPM)?
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Question 272 of 296
272. Question
What is the main difference between value investing and growth investing?
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Question 273 of 296
273. Question
Which of the following is NOT a common factor used in multifactor models?
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