CORES Operational Risk Identification & Assessment 3

Question 1

Which qualitative risk assessment tool structures risks into categories such as People, Process, Technology, and External factors?

Accepted Answer

Operational Risk Taxonomy / Categorization Framework

Answer

An operational risk taxonomy organizes risks into standard categories (People, Process, Technology, External) to ensure comprehensive identification.

Question 2

Gross risk (also called inherent risk) is best defined as:

Accepted Answer

Risk exposure before any mitigating controls are considered

Answer

Inherent (gross) risk represents the level of risk that exists in the absence of any controls or mitigating actions.

Question 3

A scenario analysis workshop for a data center outage should PRIMARILY consider:

Accepted Answer

Plausible but severe combinations of threat, vulnerability, and impact

Answer

Scenario analysis explores credible, severe combinations of factors to stress-test preparedness beyond what historical data alone reveals.

Question 4

The primary purpose of maintaining an internal loss database is to:

Accepted Answer

Provide empirical evidence of past operational failures for trend analysis and capital modeling

Answer

An internal loss database captures historical operational loss events to support trend analysis, root-cause studies, and regulatory capital calculations.

Question 5

External loss data (e.g., from ORX or public databases) is MOST valuable when:

Accepted Answer

A firm lacks sufficient internal data for rare but high-severity events

Answer

External loss data fills gaps where a firm's own history is insufficient, particularly for tail events that are rare but catastrophic.

(CORES) Certified Operational Risk Executive Specialist Practice Test

(CORES) Certified Operational Risk Executive Specialist Practice Test

CORES Operational Risk Identification & Assessment 3