RIMS CRMP Exam Study Guide Common Terms Questions
With Correct Answers
Benchmarking |- |CORRECT |ANSWER✔✔-The |process |of |measuring |the |performance |of |an |
organization |against |external |standards |of |reference |that |frequently |come |from |similar |
organizations |doing |similar |things.
Corporate |governance |- |CORRECT |ANSWER✔✔-The |system |of |rules, |practices |and |processes |
by |which |a |company |is |directed |and |controlled
Enterprise |risk |management |- |CORRECT |ANSWER✔✔-A |strategic |discipline |that |supports |the |
achievement |of |an |organization's |objectives |by |addressing |the |full |spectrum |of |its |risk |and |
managing |the |combined |impact |of |those |risks |as |an |interrelated |risk |portfolio.
Strategy: |Consider |all |risks |and |exploit |risks |as |part |of |strategy
Measurement: |Include |Upside |of |Risk |(Bugalla |and |Kugler)
Look |at |building, |expanding, |exploiting |to |add |value
Push |and |Pull |risk |performance |data
This |approach |is |Coordinated |& |Strategic
Gap |analysis |- |CORRECT |ANSWER✔✔-Comparison |of |an |existing |process |or |procedure |to |
recognized |standards |in |order |to |identify |deficiencies |or |excesses |in |the |existing |process.
Technique |that |can |be |used |to |determine |what |steps |might |need |to |be |taken |to |improve |the |
organization's |capacity |to |move |from |a |current |state |to |a |desired |future |state.
,Key |performance |indicator |(KPI) |- |CORRECT |ANSWER✔✔-An |activity |that |signals |the |
achievement |of |organizational |objectives
Key |risk |indicator |(KRI) |- |CORRECT |ANSWER✔✔-A |measurement |of |how |risk |and |volatility |
relate |to |achieving |organizational |objectives
Designed |to |manage |the |downside |of |risk
Leading |indicators |of |risk |to |business |performance; |giving |early |warning |of |potential |risk
early |signal |of |changes |in |risk |exposures |in |various |areas |of |the |enterprise
Risk |Metrics |- |CORRECT |ANSWER✔✔-Integrated |into |the |performance |objectives |of |the |
organization |for |monitoring |risks
Examples: |KPIs |and |KRIs
Indemnification |- |CORRECT |ANSWER✔✔-Contractual |obligation |placed |on |the |indemnifier |to |
return |the |indemnified |to |essentially |the |same |financial |condition |that |existed |prior |to |the |loss
|or |claim, |to |stand |in |as |the |source |for |financing |the |legal |liability
Contractual |Risk |Transfer |- |CORRECT |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 |- |CORRECT |ANSWER✔✔-wording |that |requires |one |party |to |shield |the |other |
party |from |the |effects |of |the |legal |liability |assignable |to |transfer |or |obligor
, Risk |Transfer/Sharing |- |CORRECT |ANSWER✔✔-Action |taken |when |1) |costs |of |retaining |risks |
exceeds |the |organization's |risk |tolerance; |2) |risks |(or |some |portion) |can |be |transferred |at |a |
lower |cost; |3) |risks |should |be |apportioned |based |on |an |agreement, |and |4) |it |is |required |by |
regulation
Insurance |- |CORRECT |ANSWER✔✔-Risk-transfer |mechanism |that |ensured |full |or |partial |
financial |compensation |for |the |loss, |damage |and |legal |obligations |of |a |policyholder |or |
beneficiary
PESTLE |analysis |- |CORRECT |ANSWER✔✔-Political, |Economic, |Social, |Technological, |Legal |and |
Environmental |and |identifies |the |categories |utilized |to |analyze |internal |and |external |
environments.
Risk |- |CORRECT |ANSWER✔✔-The |effect |of |uncertainty |on |objectives
Chance |of |Something |happening |that |has |an |impact |on |objectives
Being |prepared |for |the |worst |and |being |poised |to |exploit |opportunities |as |discovered
Risk |appetite |- |CORRECT |ANSWER✔✔-The |total |exposed |amount |that |an |organization |wishes |
to |undertake |on |the |basis |of |risk-return |trade-offs |for |one |or |more |desired |and |expected |
outcomes
how |much |risk |the |company |will |take |on
linked |to |rewards |(risk-return |trade-offs)
express |qualitatively |or |quantitively
Risk |attitude |- |CORRECT |ANSWER✔✔-An |organization's |or |individuals' |view/perspective |of |the |
perceived |qualitative |and |quantitative |value |that |may |be |gained |in |comparison |to |the |related |
potential |loss |or |losses.
With Correct Answers
Benchmarking |- |CORRECT |ANSWER✔✔-The |process |of |measuring |the |performance |of |an |
organization |against |external |standards |of |reference |that |frequently |come |from |similar |
organizations |doing |similar |things.
Corporate |governance |- |CORRECT |ANSWER✔✔-The |system |of |rules, |practices |and |processes |
by |which |a |company |is |directed |and |controlled
Enterprise |risk |management |- |CORRECT |ANSWER✔✔-A |strategic |discipline |that |supports |the |
achievement |of |an |organization's |objectives |by |addressing |the |full |spectrum |of |its |risk |and |
managing |the |combined |impact |of |those |risks |as |an |interrelated |risk |portfolio.
Strategy: |Consider |all |risks |and |exploit |risks |as |part |of |strategy
Measurement: |Include |Upside |of |Risk |(Bugalla |and |Kugler)
Look |at |building, |expanding, |exploiting |to |add |value
Push |and |Pull |risk |performance |data
This |approach |is |Coordinated |& |Strategic
Gap |analysis |- |CORRECT |ANSWER✔✔-Comparison |of |an |existing |process |or |procedure |to |
recognized |standards |in |order |to |identify |deficiencies |or |excesses |in |the |existing |process.
Technique |that |can |be |used |to |determine |what |steps |might |need |to |be |taken |to |improve |the |
organization's |capacity |to |move |from |a |current |state |to |a |desired |future |state.
,Key |performance |indicator |(KPI) |- |CORRECT |ANSWER✔✔-An |activity |that |signals |the |
achievement |of |organizational |objectives
Key |risk |indicator |(KRI) |- |CORRECT |ANSWER✔✔-A |measurement |of |how |risk |and |volatility |
relate |to |achieving |organizational |objectives
Designed |to |manage |the |downside |of |risk
Leading |indicators |of |risk |to |business |performance; |giving |early |warning |of |potential |risk
early |signal |of |changes |in |risk |exposures |in |various |areas |of |the |enterprise
Risk |Metrics |- |CORRECT |ANSWER✔✔-Integrated |into |the |performance |objectives |of |the |
organization |for |monitoring |risks
Examples: |KPIs |and |KRIs
Indemnification |- |CORRECT |ANSWER✔✔-Contractual |obligation |placed |on |the |indemnifier |to |
return |the |indemnified |to |essentially |the |same |financial |condition |that |existed |prior |to |the |loss
|or |claim, |to |stand |in |as |the |source |for |financing |the |legal |liability
Contractual |Risk |Transfer |- |CORRECT |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 |- |CORRECT |ANSWER✔✔-wording |that |requires |one |party |to |shield |the |other |
party |from |the |effects |of |the |legal |liability |assignable |to |transfer |or |obligor
, Risk |Transfer/Sharing |- |CORRECT |ANSWER✔✔-Action |taken |when |1) |costs |of |retaining |risks |
exceeds |the |organization's |risk |tolerance; |2) |risks |(or |some |portion) |can |be |transferred |at |a |
lower |cost; |3) |risks |should |be |apportioned |based |on |an |agreement, |and |4) |it |is |required |by |
regulation
Insurance |- |CORRECT |ANSWER✔✔-Risk-transfer |mechanism |that |ensured |full |or |partial |
financial |compensation |for |the |loss, |damage |and |legal |obligations |of |a |policyholder |or |
beneficiary
PESTLE |analysis |- |CORRECT |ANSWER✔✔-Political, |Economic, |Social, |Technological, |Legal |and |
Environmental |and |identifies |the |categories |utilized |to |analyze |internal |and |external |
environments.
Risk |- |CORRECT |ANSWER✔✔-The |effect |of |uncertainty |on |objectives
Chance |of |Something |happening |that |has |an |impact |on |objectives
Being |prepared |for |the |worst |and |being |poised |to |exploit |opportunities |as |discovered
Risk |appetite |- |CORRECT |ANSWER✔✔-The |total |exposed |amount |that |an |organization |wishes |
to |undertake |on |the |basis |of |risk-return |trade-offs |for |one |or |more |desired |and |expected |
outcomes
how |much |risk |the |company |will |take |on
linked |to |rewards |(risk-return |trade-offs)
express |qualitatively |or |quantitively
Risk |attitude |- |CORRECT |ANSWER✔✔-An |organization's |or |individuals' |view/perspective |of |the |
perceived |qualitative |and |quantitative |value |that |may |be |gained |in |comparison |to |the |related |
potential |loss |or |losses.
