medium · FRM Part 2 Operational Risk
Which of the following describes 'Self-Assessment Bias' in the Risk and Control Self-Assessment (RCSA) process?
- Overestimating the likelihood of low-frequency tail events occurring
- Units under-scoring risk or over-scoring control effectiveness to avoid scrutiny.
- Miscalculating the mean of the loss severity distribution due to a data error
- Relying exclusively on external consortium loss data instead of internal scoring
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?