AIIM Certified Operational Risk Expert CORE
Exam
Question 1. **Which of the following best matches the Basel Committee’s definition of
operational risk?**
A) Risk of loss from credit defaults
B) Risk of loss from market price movements
C) Risk of loss resulting from inadequate or failed internal processes, people, systems, or
external events
D) Risk of loss due to legal disputes
Answer: C
Explanation: The Basel definition focuses on failures of processes, people, systems, or external
events, not credit or market risk.
Question 2. **In operational risk terminology, which term describes the root cause that initiates
a loss event?**
A) Impact
B) Event
C) Cause
D) Control
Answer: C
Explanation: “Cause” is the underlying factor that triggers an “event,” which then leads to an
“impact” (loss).
Question 3. **Which classification includes activities such as money laundering and
cyber‑theft?**
A) Internal Fraud
B) External Fraud
C) Employment Practices
D) Physical Assets
, AIIM Certified Operational Risk Expert CORE
Exam
Answer: B
Explanation: External fraud covers criminal acts originating outside the organization, like
cyber‑theft.
Question 4. **Which component of the Operational Risk Framework establishes the
organization’s risk philosophy and objectives?**
A) Governance
B) Policy
C) Assessment
D) Reporting
Answer: B
Explanation: The policy component sets the overall risk philosophy, principles, and objectives.
Question 5. **The “Three Lines of Defense” model assigns the first line of defense to:**
A) Internal audit
B) Risk management function
C) Business units that own processes
D) Senior management board
Answer: C
Explanation: Business units own and manage risks directly, representing the first line.
Question 6. **Operational risk most directly contributes to which type of strategic risk?**
A) Credit risk
B) Liquidity risk
C) Reputational risk
D) Market risk
, AIIM Certified Operational Risk Expert CORE
Exam
Answer: C
Explanation: Failures in operations can damage reputation, a key strategic risk.
Question 7. **Which board responsibility is essential for effective operational risk oversight?**
A: Setting product pricing strategies
B: Approving the risk appetite statement
C: Conducting day‑to‑day risk monitoring
D: Managing IT systems
Answer: B
Explanation: The board must approve the risk appetite, providing limits for operational risk.
Question 8. **The Chief Risk Officer (CRO) primarily reports to:**
A) Chief Financial Officer
B) Head of Operations
C) Board Risk Committee or Senior Management
D) Internal Audit Manager
Answer: C
Explanation: The CRO reports to senior leadership or a board committee to maintain
independence.
Question 9. **Which metric best captures “risk culture” within an organization?**
A) Number of IT incidents per month
B) Employee survey scores on risk awareness
C) Daily profit margin
D) Ratio of loans to deposits
, AIIM Certified Operational Risk Expert CORE
Exam
Answer: B
Explanation: Surveys gauge attitudes, behaviors, and awareness that define risk culture.
Question 10. **An incentive structure that rewards volume over quality is most likely to:**
A) Reduce operational risk
B) Increase risk‑taking behavior
C) Improve compliance adherence
D) Lower staff turnover
Answer: B
Explanation: Incentives focused on volume can encourage shortcuts, raising operational risk.
Question 11. **A Risk Appetite Statement (RAS) should include:**
A) Detailed financial forecasts
B) Qualitative limits on risk types and quantitative tolerances
C) Employee performance metrics
D) Marketing strategies
Answer: B
Explanation: RAS combines qualitative boundaries with quantitative limits for risk exposure.
Question 12. **When a breach of a risk limit occurs, the first action should be:**
A) Immediate termination of staff involved
B) Escalation to senior management or the board
C) Public disclosure to regulators
D) Ignoring if the loss is minor
Answer: B
Exam
Question 1. **Which of the following best matches the Basel Committee’s definition of
operational risk?**
A) Risk of loss from credit defaults
B) Risk of loss from market price movements
C) Risk of loss resulting from inadequate or failed internal processes, people, systems, or
external events
D) Risk of loss due to legal disputes
Answer: C
Explanation: The Basel definition focuses on failures of processes, people, systems, or external
events, not credit or market risk.
Question 2. **In operational risk terminology, which term describes the root cause that initiates
a loss event?**
A) Impact
B) Event
C) Cause
D) Control
Answer: C
Explanation: “Cause” is the underlying factor that triggers an “event,” which then leads to an
“impact” (loss).
Question 3. **Which classification includes activities such as money laundering and
cyber‑theft?**
A) Internal Fraud
B) External Fraud
C) Employment Practices
D) Physical Assets
, AIIM Certified Operational Risk Expert CORE
Exam
Answer: B
Explanation: External fraud covers criminal acts originating outside the organization, like
cyber‑theft.
Question 4. **Which component of the Operational Risk Framework establishes the
organization’s risk philosophy and objectives?**
A) Governance
B) Policy
C) Assessment
D) Reporting
Answer: B
Explanation: The policy component sets the overall risk philosophy, principles, and objectives.
Question 5. **The “Three Lines of Defense” model assigns the first line of defense to:**
A) Internal audit
B) Risk management function
C) Business units that own processes
D) Senior management board
Answer: C
Explanation: Business units own and manage risks directly, representing the first line.
Question 6. **Operational risk most directly contributes to which type of strategic risk?**
A) Credit risk
B) Liquidity risk
C) Reputational risk
D) Market risk
, AIIM Certified Operational Risk Expert CORE
Exam
Answer: C
Explanation: Failures in operations can damage reputation, a key strategic risk.
Question 7. **Which board responsibility is essential for effective operational risk oversight?**
A: Setting product pricing strategies
B: Approving the risk appetite statement
C: Conducting day‑to‑day risk monitoring
D: Managing IT systems
Answer: B
Explanation: The board must approve the risk appetite, providing limits for operational risk.
Question 8. **The Chief Risk Officer (CRO) primarily reports to:**
A) Chief Financial Officer
B) Head of Operations
C) Board Risk Committee or Senior Management
D) Internal Audit Manager
Answer: C
Explanation: The CRO reports to senior leadership or a board committee to maintain
independence.
Question 9. **Which metric best captures “risk culture” within an organization?**
A) Number of IT incidents per month
B) Employee survey scores on risk awareness
C) Daily profit margin
D) Ratio of loans to deposits
, AIIM Certified Operational Risk Expert CORE
Exam
Answer: B
Explanation: Surveys gauge attitudes, behaviors, and awareness that define risk culture.
Question 10. **An incentive structure that rewards volume over quality is most likely to:**
A) Reduce operational risk
B) Increase risk‑taking behavior
C) Improve compliance adherence
D) Lower staff turnover
Answer: B
Explanation: Incentives focused on volume can encourage shortcuts, raising operational risk.
Question 11. **A Risk Appetite Statement (RAS) should include:**
A) Detailed financial forecasts
B) Qualitative limits on risk types and quantitative tolerances
C) Employee performance metrics
D) Marketing strategies
Answer: B
Explanation: RAS combines qualitative boundaries with quantitative limits for risk exposure.
Question 12. **When a breach of a risk limit occurs, the first action should be:**
A) Immediate termination of staff involved
B) Escalation to senior management or the board
C) Public disclosure to regulators
D) Ignoring if the loss is minor
Answer: B
