Preview Questions Risk Manager | Role Specific Skill

Question 1: How does counterparty risk mitigation impact the collateral management process?

Which action should you take?

Choose only one option

It limits exposure to market fluctuations by using external hedges

It eliminates the need for regulatory reporting

It ensures that counterparties have sufficient collateral to meet obligations

It focuses on guaranteeing returns for investors

Question 2: In the context of credit risk identification, what is the primary metric used to evaluate borrower risk?

Which action should you take?

Choose only one option

Credit utilization ratio

Loan-to-deposit ratio

Debt-to-income ratio

Current account balance

Question 3: Which model is most widely used to determine the relationship between expected return and risk in a portfolio?

Which action should you take?

Choose only one option

Modern Portfolio Theory

Arbitrage Pricing Theory

Black-Scholes Model

Capital Asset Pricing Model (CAPM)

Question 4: What is the primary objective of scenario analysis in risk assessment?

Which action should you take?

Choose only one option

Measure historical trends

Test portfolio resilience under hypothetical conditions

Identify risk exposure in past events

Enhance operational efficiency

Question 5: What does the term "Credit Value Adjustment (CVA)" refer to in financial risk analysis?

Which action should you take?

Choose only one option

The adjustment to market value for liquidity risk

The adjustment to derivative value for counterparty credit risk

The adjustment for operational risk in portfolio management

The adjustment for market risk in fixed-income securities

Question 6: What is the most effective way to mitigate concentration risk in a loan portfolio?

Which action should you take?

Choose only one option

Reduce overall lending volume

Diversify across industries and geographies

Focus on high-credit-score clients

Increase interest rates