Preview Questions Risk Manager | Role Specific Skill

Question 1: In portfolio risk management, which of the following approaches uses historical data to simulate various market conditions and their effects on the portfolio?

Which action should you take?

Choose only one option

Monte Carlo simulation

Regression analysis

Value at Risk (VaR)

Beta analysis

Question 2: What mitigation technique is most useful for reducing concentration risk in a portfolio of investments?

Which action should you take?

Choose only one option

Relying on a mix of government and corporate bonds

Investing only in highly liquid assets

Using value-at-risk (VaR) models

Implementing sectoral diversification strategies

Question 3: Which of the following is the best method to measure interest rate risk in a bond portfolio?

Which action should you take?

Choose only one option

Sharpe ratio

Credit spread analysis

Value at Risk (VaR)

Duration analysis

Question 4: In portfolio risk management, what does a high correlation coefficient between two assets imply?

Which action should you take?

Choose only one option

Diversification benefits are low

Assets have independent risk profiles

Portfolio risk is minimized

Both assets are uncorrelated

Question 5: What is a key characteristic of an effective risk transfer strategy in the BFSI industry?

Which action should you take?

Choose only one option

Spreading the risk across multiple business units

Reducing operational risk by eliminating risk-taking activities

Shifting risk to a third party via contracts or insurance

Using data analytics to predict future risks

Question 6: Which factor is most likely to cause liquidity risk in a banking institution?

Which action should you take?

Choose only one option

Insufficient capital reserves

Reduced customer transaction volume

Significant mismatches between assets and liabilities

High exposure to foreign exchange volatility