RIMS CRMP-IMPLEMENTING THE RISK
PROCESS EXAM QUESTIONS AND
ANSWERS
Contractual risk transfer -Answer-a legally binding agreement between two parties
whereby one agrees to indemnify and hold another party harmless for specified
actions, inactions, injuries or damages.
Hold harmless -Answer-wording that requires one party to shield the other party from
the effects of the legal liability assignable to transferor or obligor.
Risk sharing/transfer -Answer-action taken when i) costs of retaining risk exceeds
the organization's risk tolerance; ii) risks or some portion can be transferred at a
lower cost, iii) risks should be apportioned based o an agreement and iv) it is
required by regulation.
Insurance -Answer-risk transfer mechanism that ensures full or partial financial
compensation for the loss, damage and legal obligations of a policy holder or
beneficiary.
Consultative role of risk management professionals in implementing solutions -
Answer-Strategic advisors
Solutions advocates
Collaboration facilitators
Risk Monitoring -Answer-Observe
Check the progress or quality of something over a period of time
Keep under systematic review
Prioritize risks to be monitored -Answer-In monitoring risks, what should be done to
identify the greatest potential for disrupting or accelerating performance?
Risk metrics (key risk indicators) -Answer-In monitoring risks, what should be
integrated into the performance objectives of the organization?
Reviews of the risk treatment plans -Answer-In monitoring risks, what should be
scheduled as an ongoing agenda item in the responsible leader's staff agenda?
Key performance indicators (KPI) -Answer-help a firm see how it is performing in
relation to its strategic goals and objectives.
Key risk indicators (KRI) -Answer-are leading indicators of risk to business
performance, giving early warning about potential risks.
Progress reports -Answer-What should be monitored in terms of significant risks and
use of risk process?
, Leader -Answer-Risk management professional's role is to drive adoption of
enterprise-wide approach to enable the organization to achieve its objectives;
develop awareness for broad risk management competencies; enable execution of
consistent risk assessment methodologies, guiding improvement and monitoring
efforts.
Catalyst -Answer-Risk management professional's role is to provide insights on
emerging risks and offer perspectives on leading practices; share knowledge on
potential exposures and the implications to the organization.
In facilitating risk identification, risk management professional servers as -Answer-
Data consolidator to aggregate and synthesize data that enable people within an
organization to make risk-effective decisions.
Profitability and value -Answer-A benefit of ERM that provides improved profitability,
increased shareholder value, reduced financial volatility
Cross-functional view and common risk assessment process -Answer-An ERM
method which can maximize the efficiency of an organization's risk management
resources and activities
Unmanaged risk -Answer-greatest source of waste in business and economy and
can have a damaging effect on companies, employees and communities where the
business operates.
Risks viewed as an interrelated portfolio -Answer-Coordinated and strategic
approach of risk management
Risk management -Answer-strategic business discipline that supports the
achievement of an organization's objectives by addresssing the full spectrum of its
risks and managing the combined impact of those risks as an interrelated portfolio.
Clearly identified responsibility for risk management -Answer-A benefit of ERM that
fosters an environment where risk-return trade-offs are carefully evaluated;
responsibility and accountability for managing risks are explicit part of governance
Efficiency of risk management resources -Answer-A benefit of ERM that maximizes
the efficiency of an organization's risk management resources and activities through
a cross-functional view and common risk assessment process
Risk Treatments -Answer-Avoidance, Transfer, Acceptance, Mitigate
Emerging risks -Answer-Completely new or extremely rare negative events
Risk management culture and governance -Answer-Examples include Adhere to
systematic and consistent practices, limit future losses, optimal risk/reward structure
RMM attribute: Adoption of ERM-based process -Answer-RMM attribute: This
attribute measures the organization's risk culture, and considers the degree of
executive or board-level support for enterprise risk management.
PROCESS EXAM QUESTIONS AND
ANSWERS
Contractual risk transfer -Answer-a legally binding agreement between two parties
whereby one agrees to indemnify and hold another party harmless for specified
actions, inactions, injuries or damages.
Hold harmless -Answer-wording that requires one party to shield the other party from
the effects of the legal liability assignable to transferor or obligor.
Risk sharing/transfer -Answer-action taken when i) costs of retaining risk exceeds
the organization's risk tolerance; ii) risks or some portion can be transferred at a
lower cost, iii) risks should be apportioned based o an agreement and iv) it is
required by regulation.
Insurance -Answer-risk transfer mechanism that ensures full or partial financial
compensation for the loss, damage and legal obligations of a policy holder or
beneficiary.
Consultative role of risk management professionals in implementing solutions -
Answer-Strategic advisors
Solutions advocates
Collaboration facilitators
Risk Monitoring -Answer-Observe
Check the progress or quality of something over a period of time
Keep under systematic review
Prioritize risks to be monitored -Answer-In monitoring risks, what should be done to
identify the greatest potential for disrupting or accelerating performance?
Risk metrics (key risk indicators) -Answer-In monitoring risks, what should be
integrated into the performance objectives of the organization?
Reviews of the risk treatment plans -Answer-In monitoring risks, what should be
scheduled as an ongoing agenda item in the responsible leader's staff agenda?
Key performance indicators (KPI) -Answer-help a firm see how it is performing in
relation to its strategic goals and objectives.
Key risk indicators (KRI) -Answer-are leading indicators of risk to business
performance, giving early warning about potential risks.
Progress reports -Answer-What should be monitored in terms of significant risks and
use of risk process?
, Leader -Answer-Risk management professional's role is to drive adoption of
enterprise-wide approach to enable the organization to achieve its objectives;
develop awareness for broad risk management competencies; enable execution of
consistent risk assessment methodologies, guiding improvement and monitoring
efforts.
Catalyst -Answer-Risk management professional's role is to provide insights on
emerging risks and offer perspectives on leading practices; share knowledge on
potential exposures and the implications to the organization.
In facilitating risk identification, risk management professional servers as -Answer-
Data consolidator to aggregate and synthesize data that enable people within an
organization to make risk-effective decisions.
Profitability and value -Answer-A benefit of ERM that provides improved profitability,
increased shareholder value, reduced financial volatility
Cross-functional view and common risk assessment process -Answer-An ERM
method which can maximize the efficiency of an organization's risk management
resources and activities
Unmanaged risk -Answer-greatest source of waste in business and economy and
can have a damaging effect on companies, employees and communities where the
business operates.
Risks viewed as an interrelated portfolio -Answer-Coordinated and strategic
approach of risk management
Risk management -Answer-strategic business discipline that supports the
achievement of an organization's objectives by addresssing the full spectrum of its
risks and managing the combined impact of those risks as an interrelated portfolio.
Clearly identified responsibility for risk management -Answer-A benefit of ERM that
fosters an environment where risk-return trade-offs are carefully evaluated;
responsibility and accountability for managing risks are explicit part of governance
Efficiency of risk management resources -Answer-A benefit of ERM that maximizes
the efficiency of an organization's risk management resources and activities through
a cross-functional view and common risk assessment process
Risk Treatments -Answer-Avoidance, Transfer, Acceptance, Mitigate
Emerging risks -Answer-Completely new or extremely rare negative events
Risk management culture and governance -Answer-Examples include Adhere to
systematic and consistent practices, limit future losses, optimal risk/reward structure
RMM attribute: Adoption of ERM-based process -Answer-RMM attribute: This
attribute measures the organization's risk culture, and considers the degree of
executive or board-level support for enterprise risk management.
