CRO Operational Resilience Planning 2

Question 1

Which metric best measures the maximum tolerable period of disruption for a critical business service?

Accepted Answer

Maximum Tolerable Period of Disruption (MTPD)

Answer

MTPD defines the absolute outer limit beyond which a disruption would cause irreversible harm to the organization.

Question 2

In operational resilience, what does 'impact tolerance' represent?

Accepted Answer

The maximum level of disruption a firm can tolerate before it causes intolerable harm

Answer

Impact tolerance sets the outer boundary of disruption a firm can absorb before harm to customers or the financial system becomes intolerable.

Question 3

A CRO is reviewing third-party concentration risk. Which scenario represents the greatest operational resilience threat?

Accepted Answer

A single cloud provider hosting all critical processing systems

Answer

Single-provider concentration for all critical systems creates a single point of failure with potential systemic impact.

Question 4

Under the UK PRA's operational resilience policy, firms must be able to remain within impact tolerances during severe but plausible scenarios by what year?

Accepted Answer

2025

Answer

UK regulators set March 2025 as the deadline for firms to demonstrate they can remain within impact tolerances under stress.

Question 5

What is the primary purpose of mapping dependencies in important business services?

Accepted Answer

To identify vulnerabilities and single points of failure that could breach impact tolerances

Answer

Dependency mapping reveals where failures in people, processes, technology, or third parties could cascade and breach impact tolerances.

(CRO) Chief Risk Officer Certification Practice Test

(CRO) Chief Risk Officer Certification Practice Test

CRO Operational Resilience Planning 2