easy · FRM Part 2 Operational Risk
A bank's RCSA process requires a 'Likelihood' score on a 1-5 scale. A specific IT outage risk is estimated to have a 'Mean Time Between Failures' (MTBF) of 20 years.
If the RCSA defines Score 1 as 'once in 30+ years' and Score 2 as 'once in 10-30 years', what is the inherent likelihood score?
- 2
- 1
- 0.05
- 4
Sign up free to see the explanation and track your rank →
More FRM Part 2 Operational Risk practice
- Which of the following describes the 'One Big Loss' principle for heavy-tailed (subexponen
- In the Bow-Tie analysis framework, where do 'Preventive Controls' sit relative to the oper
- A customer consistently deposits $9,800 in cash at three dif… — This behavior is a classic
- The Standardized Measurement Approach (SMA) formula is composed of two primary factors: th
- What is the regulatory treatment for 'Boundary Events' regarding capital requirements unde
- In the Standardized Measurement Approach (SMA), the Business Indicator (BI) serves as a pr
- Under a proper governance framework, 'Model Limitations' must be:
- If the bank had a poor loss history (LC > BIC), what is the impact on its capital?