Preview Questions Risk Manager | Role Specific Skill

Question 1: How does the SEC's Rule 10b-5 help mitigate risks related to financial market transparency?

Which action should you take?

Choose only one option

By regulating insurance company operations

By prohibiting fraudulent practices in securities trading

By monitoring the systemic risk in the bond market

By requiring companies to disclose their debt exposure

Question 2: When managing portfolio risk, the correlation coefficient between asset returns helps to determine:

Which action should you take?

Choose only one option

The portfolio's liquidity position

The risk-adjusted returns

The expected return of the portfolio

The potential for diversification

Question 3: How does regulatory risk impact strategic planning in BFSI?

Which action should you take?

Choose only one option

By influencing capital allocation

By promoting high-risk investments

By removing the need for innovation

By dictating customer acquisition strategy

Question 4: How does asset quality affect a bank's financial analysis for risk management?

Which action should you take?

Choose only one option

High asset quality directly increases bank profitability

Poor asset quality can increase the likelihood of loan defaults

Asset quality has no significant effect on risk management

Poor asset quality reduces liquidity risk for the bank

Question 5: What is the purpose of "stress testing" in financial risk analysis?

Which action should you take?

Choose only one option

To calculate the capital requirements of a portfolio

To determine the expected returns based on historical performance

To evaluate the impact of normal market fluctuations on portfolio returns

To assess a portfolio's performance under extreme, adverse conditions

Question 6: When implementing a mitigation strategy for operational risk, which of the following is crucial?

Which action should you take?

Choose only one option

Reducing regulatory oversight

Increasing transaction volume to minimize loss

Implementing a more complex IT system

Employee training and awareness programs