Preview Questions Risk Manager | Role Specific Skill

Question 1: What is cross-border compliance risk in the context of financial services?

Which action should you take?

Choose only one option

Risk from unregulated global banking activities

Risk arising from differences in regulatory practices between jurisdictions

Risk associated with managing multi-currency transactions

Risk from legal disputes with international clients

Question 2: How can a risk manager mitigate the impact of systemic risk during a financial crisis?

Which action should you take?

Choose only one option

By increasing short-term debt financing

By focusing exclusively on low-risk assets

By enhancing liquidity buffers

By reducing exposure to correlated assets

Question 3: What is a key factor in determining the appropriate risk appetite for a financial institution?

Which action should you take?

Choose only one option

The institution's overall financial stability and objectives

The institution's stock market performance

The diversity of the institution's loan portfolio

The regulatory capital requirements

Question 4: Which of the following best describes the role of hedging in risk mitigation strategies?

Which action should you take?

Choose only one option

To increase the volatility of returns for higher profits

To diversify investments across multiple sectors

To reduce the impact of adverse price movements on assets

To minimize the regulatory requirements of financial institutions

Question 5: When designing a capital adequacy strategy to mitigate risk, which factor is most important for ensuring a bank's ability to absorb financial losses?

Which action should you take?

Choose only one option

Interest coverage ratio

Leverage ratio

Minimum capital requirement

Loan-to-value ratio

Question 6: What is the purpose of the ?accredited investor? rule under U.S. securities regulations in risk management?

Which action should you take?

Choose only one option

To limit public access to financial services

To standardize portfolio management regulations

To restrict foreign companies from offering financial products

To ensure that individuals investing in complex financial products are financially capable