CRO Enterprise Risk Management & Governance 3

Question 1

Which of the following best describes 'residual risk' in the context of enterprise risk management?

Accepted Answer

The risk remaining after management applies controls and risk responses

Answer

Residual risk is the level of risk that remains after management has implemented controls and other risk responses to address inherent risk.

Question 2

A CRO discovers that a business unit's actual risk exposure consistently exceeds its approved risk limit. The most appropriate immediate action is to:

Accepted Answer

Require the business unit to reduce exposure or obtain board approval for a limit exception

Answer

A risk limit breach requires either reducing exposure to within the approved limit or following a formal exception process that may include board escalation.

Question 3

Which ERM maturity model stage is characterized by risk management being consistently applied enterprise-wide with quantitative metrics and continuous improvement?

Accepted Answer

Optimized

Answer

The Optimized stage represents the highest ERM maturity, where risk management is data-driven, continuously improved, and fully embedded across the enterprise.

Question 4

An organization's risk committee requires that all emerging risks be formally logged. The PRIMARY benefit of this practice is:

Accepted Answer

Enabling proactive identification and monitoring before risks materialize

Answer

Formally logging emerging risks enables proactive monitoring and response planning before those risks escalate into material losses.

Question 5

In ERM governance, 'risk culture' is most directly shaped by:

Accepted Answer

Leadership behavior, incentives, and accountability structures

Answer

Risk culture is fundamentally driven by how leaders behave, what behaviors are rewarded, and how accountability for risk outcomes is assigned.

(CRO) Chief Risk Officer Certification Practice Test

(CRO) Chief Risk Officer Certification Practice Test

CRO Enterprise Risk Management & Governance 3