INDIVIDUAL MANAGE YOUR RISK QHS
COMPREHENSIVE EXAM SCRIPT 2026 FULL
QUESTIONS CORRECT ANSWERS
◉ Where does data analytic fit in? Answer: -Tools to predict areas of
vulnerability in organizations to black swans and other kinds of risk
-Looks for markers of situations where human behavior can impact
operational risk
-Look for factors that influence human behavior (laziness, fatigue,
moral or ethical opportunity stress: debt, job concerns, family issues.
◉ Could data analytics have helped BP? Answer: -There were reports
that on-site employees were worried about such an event, but no
channel to communicate
-BP didn't monitor systems closely, costly to do so, cut corners
◉ Overview of the global financial crisis Answer: -the global
financial crisis was "a failure of risk management"
-But strategy (or lack therof) played a role
-Fiercening of capitalism vs corporate strategy
◉ How does the Mortgage System work? Answer: The mortgage
banking process begins with the mortgage banker borrowing short-
,term capital to make long-term residential real estate mortgage
loans to home buyers.
◉ What is Fannie Mae? Answer: Federal National Mortgage
Association (FNMA), commonly known as Fannie Mae, created in
1938 to establish a secondary market for mortgages insured by the
Federal Housing Administration (FHA). Fannie Mae buys mortgages
on the secondary market, pools them and sells them as mortgage-
backed securities to investors on the open market. This secondary
mortgage market helps to replenish the supply of lendable money
for mortgages and ensures that money continues to be available for
new home purchases. Freddie Mac makes money by charging a
guarantee fee which is usually a small part of the interest payment of
the loans they have securitized into bonds. (For example, Freddie
Mac may purchase a loan with a rate of 5.19 percent and put it into a
mortgage backed security (MBS) bond which has a 5.0 percent
coupon, keeping 0.19 percent as the guarantee fee.)
◉ Freddie Mac Answer: a corporation authorized by Congress to
provide a secondary market for residential mortgages
◉ What is a conforming mortgage? Answer: Loans that meet the
standards that are required for Fannie Mae & Freddie Mac to
purchase the loan (i.e. size limit, standardized forms, etc.)
, ◉ What is mortgage securitization? Answer: A typical example of
securitization is a mortgage-backed security (MBS), which is a type
of asset-backed security that is secured by a collection of mortgages.
◉ Credit default swaps Answer: insurance offered by insurance
companies promising that investments would be insured if
mortgaged-backed securities went bad
◉ Time to Recovery (TTR) Answer: a model that focuses on time to
recovery (TTR) of the supplier (estimated)
◉ risk exposure index Answer: Our exposure to that supplier
◉ Methodical approach Answer: Methodical approach does not
forget about small, low-cost commodity suppliers which can have a
large impact"
-4 benefits of this approach:
1) Identifies hidden exposures
2) Avoids the need for predictions about rare events
3) Reveals supply chain dependencies and bottlenecks
4) Promotes discussion and learning
5) Allows for more focused risk management
6) Many key suppliers are properly managed
COMPREHENSIVE EXAM SCRIPT 2026 FULL
QUESTIONS CORRECT ANSWERS
◉ Where does data analytic fit in? Answer: -Tools to predict areas of
vulnerability in organizations to black swans and other kinds of risk
-Looks for markers of situations where human behavior can impact
operational risk
-Look for factors that influence human behavior (laziness, fatigue,
moral or ethical opportunity stress: debt, job concerns, family issues.
◉ Could data analytics have helped BP? Answer: -There were reports
that on-site employees were worried about such an event, but no
channel to communicate
-BP didn't monitor systems closely, costly to do so, cut corners
◉ Overview of the global financial crisis Answer: -the global
financial crisis was "a failure of risk management"
-But strategy (or lack therof) played a role
-Fiercening of capitalism vs corporate strategy
◉ How does the Mortgage System work? Answer: The mortgage
banking process begins with the mortgage banker borrowing short-
,term capital to make long-term residential real estate mortgage
loans to home buyers.
◉ What is Fannie Mae? Answer: Federal National Mortgage
Association (FNMA), commonly known as Fannie Mae, created in
1938 to establish a secondary market for mortgages insured by the
Federal Housing Administration (FHA). Fannie Mae buys mortgages
on the secondary market, pools them and sells them as mortgage-
backed securities to investors on the open market. This secondary
mortgage market helps to replenish the supply of lendable money
for mortgages and ensures that money continues to be available for
new home purchases. Freddie Mac makes money by charging a
guarantee fee which is usually a small part of the interest payment of
the loans they have securitized into bonds. (For example, Freddie
Mac may purchase a loan with a rate of 5.19 percent and put it into a
mortgage backed security (MBS) bond which has a 5.0 percent
coupon, keeping 0.19 percent as the guarantee fee.)
◉ Freddie Mac Answer: a corporation authorized by Congress to
provide a secondary market for residential mortgages
◉ What is a conforming mortgage? Answer: Loans that meet the
standards that are required for Fannie Mae & Freddie Mac to
purchase the loan (i.e. size limit, standardized forms, etc.)
, ◉ What is mortgage securitization? Answer: A typical example of
securitization is a mortgage-backed security (MBS), which is a type
of asset-backed security that is secured by a collection of mortgages.
◉ Credit default swaps Answer: insurance offered by insurance
companies promising that investments would be insured if
mortgaged-backed securities went bad
◉ Time to Recovery (TTR) Answer: a model that focuses on time to
recovery (TTR) of the supplier (estimated)
◉ risk exposure index Answer: Our exposure to that supplier
◉ Methodical approach Answer: Methodical approach does not
forget about small, low-cost commodity suppliers which can have a
large impact"
-4 benefits of this approach:
1) Identifies hidden exposures
2) Avoids the need for predictions about rare events
3) Reveals supply chain dependencies and bottlenecks
4) Promotes discussion and learning
5) Allows for more focused risk management
6) Many key suppliers are properly managed
