ENTERPRISE RISK MANAGEMENT (RSK2601) FRM EXAM
BANK 1 QUESTIONS WITH VERIFIED SOLUTIONS GRADED
A+ 2025-2026
RSK2601
BIGGYPERFECT STUVIA
SMART STUDY
, ENTERPRISE RISK MANAGEMENT (RSK2601)
FRM EXAM BANK 1 QUESTIONS WITH VERIFIED
SOLUTIONS GRADED A+ 2025-2026
,Shortcomings of risk metrics ANSWER >> -May not scale over time
-Historical data may be meaningless
-Not designed to account for catastrophes
-VaR says nothing about losses in excess of VaR
-May not handle sudden illiquidity
Importance of communication for risk managers ANSWER >> Need to assess risk and
tell management so they can determine which risks to take on
Ways firms can fail to account for risks ANSWER >> -Firm may ignore known risk
-Somebody in firm may know about risk, but it's not captured by models
-Realization of a truly unknown risk
Ways risk can be mismeasured ANSWER >> -Wrong distribution
-Historical sample may not apply
, Roles of risk management ANSWER >> -Asses firm risks
-Communicate risks
-Manage and monitor risks
Practical considerations related to ERM implementation ANSWER >> -Designate ERM
champion - usually CRO
-Make ERM part of firm culture
-Determining all possible risks
-Quantifying operational and strategic risks
-Integrating risks (dependencies)
-Lack of risk transfer mechanisms
-Monitoring
Models used in ERM framework ANSWER >> Modeling approach is typically between
statistical analytic models and structural simulation models
Risk types addressed by ERM ANSWER >> -Hazard
-Financial
-Operational
BANK 1 QUESTIONS WITH VERIFIED SOLUTIONS GRADED
A+ 2025-2026
RSK2601
BIGGYPERFECT STUVIA
SMART STUDY
, ENTERPRISE RISK MANAGEMENT (RSK2601)
FRM EXAM BANK 1 QUESTIONS WITH VERIFIED
SOLUTIONS GRADED A+ 2025-2026
,Shortcomings of risk metrics ANSWER >> -May not scale over time
-Historical data may be meaningless
-Not designed to account for catastrophes
-VaR says nothing about losses in excess of VaR
-May not handle sudden illiquidity
Importance of communication for risk managers ANSWER >> Need to assess risk and
tell management so they can determine which risks to take on
Ways firms can fail to account for risks ANSWER >> -Firm may ignore known risk
-Somebody in firm may know about risk, but it's not captured by models
-Realization of a truly unknown risk
Ways risk can be mismeasured ANSWER >> -Wrong distribution
-Historical sample may not apply
, Roles of risk management ANSWER >> -Asses firm risks
-Communicate risks
-Manage and monitor risks
Practical considerations related to ERM implementation ANSWER >> -Designate ERM
champion - usually CRO
-Make ERM part of firm culture
-Determining all possible risks
-Quantifying operational and strategic risks
-Integrating risks (dependencies)
-Lack of risk transfer mechanisms
-Monitoring
Models used in ERM framework ANSWER >> Modeling approach is typically between
statistical analytic models and structural simulation models
Risk types addressed by ERM ANSWER >> -Hazard
-Financial
-Operational
