GRC Enterprise Risk Management Frameworks 4

Question 1

Which quantitative technique uses repeated random sampling to model the probability distribution of risk outcomes?

Accepted Answer

Monte Carlo simulation

Answer

Monte Carlo simulation runs thousands of random scenarios to produce a probability distribution of possible outcomes, quantifying risk exposure.

Question 2

ISO 31000:2018 identifies 'communication and consultation' as a process that should occur at which stage of the risk management process?

Accepted Answer

Throughout all stages of the risk management process

Answer

ISO 31000 specifies that communication and consultation with stakeholders should be an ongoing activity throughout all stages of the risk management process.

Question 3

What is the purpose of scenario analysis in ERM?

Accepted Answer

To explore plausible future states and assess their potential risk impacts

Answer

Scenario analysis examines hypothetical but plausible situations to evaluate how different conditions could affect organizational risk exposure.

Question 4

Which COSO ERM 2017 component focuses on tracking performance against risk-adjusted targets and identifying changes in risk?

Accepted Answer

Review and Revision

Answer

Review and Revision involves monitoring the ERM program's effectiveness, tracking performance, and updating the approach as the risk landscape changes.

Question 5

A financial institution sets a maximum acceptable loss of $5 million from operational risk events per quarter. This figure most directly represents:

Accepted Answer

Risk tolerance

Answer

Risk tolerance is the specific, measurable boundary around acceptable variation in outcomes — it operationalizes the broader risk appetite statement.

(GRC) Governance, Risk, and Compliance Certification Practice Test

(GRC) Governance, Risk, and Compliance Certification Practice Test

GRC Enterprise Risk Management Frameworks 4