BFM B - Unit 16 - Motivational Banker
1. Operational Risk arises from (a) Inadequate or failed internal processes (b) People and systems (c) External events (d) Defaults (e) Market price fluctuations. Which of the following is true?

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2. The International Convergence of Capital Measurement and Capital Standards recommended for operational risk. (a) Cause based classification (b) Effect based classification (c) Event based classification. Which of the following is true?

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3. Benefits of an integrated risk framework are (a) To relate capital and reserves more effectively to their actual level of risk exposure. (b) To evaluate pricing decisions and product profitability. (c) In making risk transfer decisions. Which of the following is true?

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4. Rewards of proper management of operational risks are (a) Lesser risk capital (b) Cost reductions in operations (c) Competitive edge. Which of the following is true?

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5. Given the following Probability of occurrence = 4, Potential financial impact = 4, Impact of internal controls = 0%. What is the estimated level of operational risk?

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6. What is the beta factor for corporate finance under Standardised approach?

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7. _____________is the process that involves bank's assessment of its operations and activities against already listed menu of potential operational risk weaknesses.

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8. What is the Basel Committee's definition of Operational Risk?

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9. Which of the following is NOT a classification of operational risks based on events according to the Basel Committee?

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10. What are the options provided by Basel III for the measurement of operational risk for capital allocation purposes?

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11. What is the main challenge in operational risk measurement?

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12. What approach is the Basel Committee contemplating to introduce in place of the Advanced Measurement Approaches (AMA)?

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13. What percentage of the total operational risk capital charge calculated under the Advanced Measurement Approaches (AMA) can be recognized for insurance mitigation?

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14. What does RBI's new standardized approach on operational risk aim to replace?

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15. What is the primary component of the operational risk capital requirements under RBI's new standardized approach?

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16. What is the minimum threshold for including a loss event in the data collection and calculation of average annual losses as per RBI guidelines?

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17. What may RBI require banks to apply if they do not have high-quality operational risk annual loss data?

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18. What is one of the benefits of implementing Integrated Risk Management?

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19. What does integrated risk management involve?

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20. What does integrated risk management consider in addition to profits or profitability ratios?

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21. What is critical for achieving an optimum surplus in integrated risk management?

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22. What is the Basic Indicator Approach used for?

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23. How is the capital for operational risk calculated under the Basic Indicator Approach?

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24. What is excluded from gross income in the calculation for the Basic Indicator Approach?

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25. What is the Standardised Approach (TSA) used for?

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26. How many business lines are considered under the Standardised Approach (TSA)?

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27. Which business line has the highest risk factor according to the TSA?

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28. What is the capital charge for the Retail Banking business line under the TSA?

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29. When did banks have to apply for the Standardised Approach according to RBI's timelines?

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30. What is required for a bank to migrate to the Advanced Measurement Approach (AMA)?

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31. How does the Advanced Measurement Approach (AMA) differ from the Basic Indicator Approach (BIA) and the Standardised Approach (TSA)?

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32. Which type of banks is the Advanced Measurement Approach (AMA) more suitable for?

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33. What factors are considered in calculating the capital charge under the Advanced Measurement Approach (AMA)?

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34. Which committee is considering repealing the Advanced Measurement Approach (AMA)?

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35. Under which approach can insurance provide capital allowance for operational risk mitigation?

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