Risk Assessment & Mitigation Flashcards
7 cards from real APRP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Assessment & Mitigation flashcards as text
Under Regulation E, what is the maximum liability for a consumer who reports an unauthorized electronic fund transfer within 2 business days of learning of the loss?
Answer: $50
Regulation E caps consumer liability at $50 if the unauthorized EFT is reported within 2 business days of learning of the loss.
A key risk indicator (KRI) differs from a key performance indicator (KPI) in that a KRI:
Answer: Signals an increase in the likelihood of future risk events
KRIs are forward-looking metrics that warn of rising risk levels, while KPIs measure operational or financial performance.
Which risk mitigation strategy is most appropriate for a risk with very low probability but potentially catastrophic financial impact?
Answer: Transfer the risk through insurance or contractual means
Insurance or contractual transfer is ideal for low-probability, high-severity risks because the premium cost is manageable and the potential loss is too severe to self-insure.
In payments risk management, 'velocity checking' is used to mitigate which type of risk?
Answer: Fraud risk from rapid successive transactions
Velocity checks flag or block accounts or cards that generate an abnormally high number of transactions within a short period, a common fraud indicator.
A risk control self-assessment (RCSA) is most valuable because it:
Answer: Engages business-line staff to identify and evaluate their own operational risks
RCSAs leverage frontline employees' operational knowledge to surface risks and evaluate control effectiveness in ways that top-down audits may miss.
Which scenario best illustrates 'systemic risk' in the payments industry?
Answer: Failure of a central clearinghouse disrupting settlement across multiple banks
Systemic risk refers to the potential for the failure of one interconnected entity to cascade across the entire financial system, as a clearinghouse failure would.
Which of the following BEST describes the purpose of a Business Impact Analysis (BIA) in payments risk management?
Answer: Identify critical business functions and quantify the impact of their disruption
A BIA identifies mission-critical functions, establishes recovery time objectives, and quantifies financial and operational harm from disruption to support continuity planning.