Preview Questions Risk Manager | Role Specific Skill

Question 1: Which of the following best measures portfolio risk by evaluating the variance of portfolio returns relative to market movements?

Which action should you take?

Choose only one option

Standard deviation

Beta

Value at Risk (VaR)

Sharpe ratio

Question 2: What does a high "beta" coefficient indicate in financial analysis?

Which action should you take?

Choose only one option

The asset or portfolio is less sensitive to market changes

The asset is not affected by market fluctuations

The asset or portfolio is more volatile compared to the market

The asset has a lower risk of default

Question 3: How is the risk associated with interest rate fluctuations commonly measured in financial analysis?

Which action should you take?

Choose only one option

Operating leverage

Duration of the bond or portfolio

Price-to-earnings ratio

Profit margin

Question 4: Which of the following strategies would be most effective in strategic planning to manage market risk during periods of economic uncertainty?

Which action should you take?

Choose only one option

Reducing capital reserves to protect profitability

Increasing loans and credit to maintain cash flow

Selling off low-risk assets and investing in high-return options

Hedging using derivatives to mitigate risk

Question 5: Which of the following techniques is used to quantify the market risk of an asset?

Which action should you take?

Choose only one option

Earnings per share (EPS)

Debt-to-asset ratio

Return on assets (ROA)

Value at Risk (VaR)

Question 6: Basel III introduced the Leverage Ratio requirement. What is its main purpose in risk assessment?

Which action should you take?

Choose only one option

To measure the quality of the assets held by the institution

To limit the exposure to market risk

To limit the exposure to credit risk

To ensure institutions have enough capital relative to their exposure to risk