Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CRM Chapter 1 > Exam Review #1 > Flashcards

Exam Review #1 Flashcards

1
Q

Risk management standard

A

Are voluntary

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

RMM

Risk maturity model

A 
Objective consistent tool to conduct self assessment, not a standard or process or framework 
ERM based 
Risk appetite management 
Root cause 
Performance management
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Risk governance

A

Integrating management principals governing the organization with the RM process

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

ISO 31000

A

Applies regarding whether risk has positive or negative consequences

Can be applied to risks that have positive outcome

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Risk assessment

A

Includes risk identification
Risk analysis
Risk evaluation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Risk criteria

A

Information used to evaluate the significance of an orgs risks
Can we meet strategic goals
Defined as reference standards

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Supply chain risk

A

Associate with iSO 31000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

COSO 5Components

A 
Gorvernance
Strategy 
Performance 
Review and revision 
Information,communication, reporting
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

COSO governance and culture

A

To do with board of directors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

COSO performance

A

Component that refers to practices that permit organizations in all departments assess and respond to risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Abandonment

A

When you eliminate the loss exposure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Cash matching

A

An insurer can eliminate interest rate risk. To fund liabilities in a timely manner. To achieve this we make investments hold them till maturity to match the amounts the insurer will have to pay out

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Interest rate risk?

A

Systematic affects all orgs
The risk a bond future value will decline because of changes in interest rates
Swaps can be used to hedge
Insurers are vulnerable due to investments so use cash matching

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Reinvestment risk

A

Not being able to earn the same rate of return from an investment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Risk based capital system

A

Min. Capital for Insurer to support operations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Basel 1

Capital to assets 2003

A

Considers relative risk of assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Advantage of economic capital analysis

A

Focus attention on risks attached to activities
Ensure solvency at a given level 99% of the time
Economical capital is the amount of money you should have put away for unexpected losses ( not told to you by regulator) almost seen as overarching more than
Frequency is low amount of loss is high
Rare but deadly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Economic Capital

A

Amount you need to stay solvent at a given risk tolerance level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Market Value Margin

A

Additional payment in case reserves are inadequate, additional money for investors to be attractive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Market Value Surplus

A

Fair value accounting, fair value of assets minus fair value of liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Value at Risk VAR

A

All risks together to estimate the probability liabilities will exceed the assets by various amounts over a 1 year period. VAr is used in banks know how much money they are losing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

ERM 4 components

A

Align and integrate
Lead establish accountability
Allocate resources
Communicate and report

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

ERM 5 steps -Process

A 
Scan environment 
Identify risks
Analyze risks 
Treat risks
Monitor and assure
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Using existing processes in RM

A

Reduces the resistance to change from introducing new procedures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Risk Appetite

Internal Environment

A

Is a factor of internal environment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Selecting RM Techniques

A

Is based on a forecast of the frequency and severity of expected losses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

KRI

A

Metrics used to measure uncertainty of meeting strategic objectives
Used to evaluate performance
Remember uncertainty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

KPI

A

$ or non $ that defines how successful we will be at meeting long term goals
How is the thing performing good or bad?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Internal environment

A

Equipment
Systems
People
Experience

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Risk Classification

A

Pure and speculative
Objective or subjective
Diversifiable or non

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Risk Quadrants

A

Hazard
Operational
Financial
Strategic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Benefits of ERM

A

Identify key exposures
Transparency
Risk transfer negative events
Protect tangible or intangible assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Pillars of ERM

A

Interdependency matters
Correlation increases risk
Portfolio theory spread of risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Risk management process

A

Identify
Analyze
Decide on response
Monitoring and control

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

RMM

A 
Not a standard or process but focuses on 
Erm based approach 
Risk appetite management
Root cause discipline
Performances management
Resilience
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Solvency II Pillars

A

Risk based capital is adequate
Higher governance
Greater transparency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Exposure

A

Maximum potential damage
A condition that presents possibility for loss or gain, whether or not actually loss occurs
Think about underwriting they have to think of worst case senario

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Basic risk measures

A 
Exposure 
Volitiity 
Likelihood 
Consequences 
Time horizon 
Correlation

Focus is on quantifying risks how much will it affect us

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Regression analysis

A

Trend analysis used to estimate relationships between variables

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

EaR

A

Amount they will gain, amount that might change due to change in interest rates helps with planning used more commonly in Non-banking sectors

41
Q

COSO vs. iSO

A

COSO was meant for financial controls

Typically looks at adverse price negative outcomes

42
Q

BASEL II 3Pillars

A

Financial adequacy
Risk management
Transparency

43
Q

Tolerable uncertainty

A

Level managers are comfortable with risks

44
Q

PDCA deals with ERM framework and process

A

Plan Do check Act

45
Q

Traditional Risk Management Process

Focus on Hazard risk only

A 
Identify 
Analyze 
Examine feasibility 
Select 
Implement 
Monitor
46
Q

Risk Control

A

Avoid preventive reduction
Usually done by ops manager or staff
Conscious act or not to act that reduces the frequency severity and makes losses more predictable

47
Q

Risk Control

A 
Avoidance 
Prevention 
Reduction 
Separation 
Duplication
Diversification
48
Q

Risk based auditing

A

Prioritize the use of internal resources in the areas the pose the greatest risk

49
Q

Risk assurance

A

The level of confidence in the effectiveness of the org’s risk management culture practices

50
Q

CRSA

A

A process managers perform an annual self audit to evaluate the effectiveness of business processes the Mangers do it can be expensive

51
Q

Systematic risk

A

Risk that is common to all securities in the same class

52
Q

Sarbanes-oxley act

A

2002 require CEO and CFO to verify quarterly and annual financials

53
Q

COSO Internal Controls

A

Monitoring - when you check if controls are functioning measures compliance (fictious claims question)

54
Q

Report certification

A

Think external auditors

55
Q

Employees have been informed of the commitment to risk management

A

Pick internal audit to administer questionnaire

56
Q

Structured Data

A

Organized into databases with defined fields

57
Q

Unstructured Data

A

Not organized in database can include images or non traditional media

58
Q

Data Science

A

Is useful for unstructured Data

59
Q

Ways Insurer and risk manger can use data science to improve results

A

Discover new relationships

60
Q

Descriptive Approach

A

Is applied when you have a specific problem

61
Q

Holdout Data

A

Purpose is to help ensure the model is not overfitted to training data

62
Q

Precision of Predictive Model

A

False-negatives etc.
tP divide (TP + FP)
Line up predicted yes to actual yes = TP
Number above is FP

40/ (40+5)

63
Q

Find accuracy of predictive model

A

Actual No divide by Total

Look for larger numbers

64
Q

Training a predictive model reason for cross validation

A

Limited amount of training data unwise not to use some of it for training because of need for holdout data

65
Q

Root node

A

Topmost node

The most informative attribute

66
Q

Cluster analysis

A

Identify previously unknown groupings

67
Q

Leaf node

A

A branch of a classification tree that leads to a target variable
The last end

68
Q

Lift

A

Percentage of positives divided by percentage expected by chance

69
Q

Expected Value

A

Weighted Average of all possible outcomes

70
Q

Empirical probability

A

Based on actual experience through historical data or facts

71
Q

Theoretical probability

A

Based on theory rather than actual experiences

Think dice

72
Q

Probability analysis

A

Technique for forecasting events

73
Q

Event tree

A

Only accidental

74
Q

Qualitative Assessment

A

Measures risk by significance

High medium or low

75
Q

ISO 300

Sources and consequences of a risk

A

Risk Analysis

76
Q

Quantitative analysis

A

Uses historical data to reach a numeric indication of the level of risk

77
Q

Flip a coin

A

Mutually exclusive
Only one outcome
Empirical frequency pick highest number

78
Q

Coefficient of variation

A

Compare different shapes
Means or standard deviations

=Standard deviations ➗ by mean or multiply backwards

79
Q

Expected value

A

Weighted average

80
Q

Trend analysis

A

Looks at patterns in past data

81
Q

Regression analysis

A

Varies predictably with another variable

82
Q

Event tree

A

Only success or failure
Analyze consequences of accidents rather than decisions
Differ in their purpose

83
Q

Data credibility

A

Available data ya can accurately indicate future losses

84
Q

Timing dimension

A

Analyze investments income and interest

Money held in reserves to pay for a loss can earn interest until the payment is made

85
Q

HAZOP

A 
Complex scientific systems 
Review of a process or system 
Team approach
Experts and stakeholders 
Recommend solutions
86
Q

Scenario analysis

A

Identifies various risks and projects the potential consequences of those risks

87
Q

Delphi

A

Involves select group of experts question response cycle until consensus is achieved

88
Q

Risk register

A

Report to depict all risk scenarios likelihood of loss or scenario and consequences
Reports in individual risks
Developed at risk owner level links activities to to a list of identified risks consolidated at enterprise level

89
Q

Residual risk

A

The difference between optimum risk represents the risk treatment opportunity to further reduce risk
Measures the effectiveness of risk treatment

90
Q

Optimum risk

A

Level of risk that is within the orgs appetite

91
Q

Flowchart

A

Depicts organizations activities and processes

92
Q

Income statement

A

If trying to find net income exposures

93
Q

Balance sheet

A

Lists assets property values

94
Q

SWOT

A

Strength weakness opportunities threats associated with a purchase
If looking at new product analysis of internal and external factors

95
Q

Delphi

A

Group of experts respond to survey or inquiry

96
Q

Sensitivity analysis

A

The effect of a change in one or more variables on the result of a financial analysis

97
Q

Risk financing

A

Conscious act to act or not act that generates funds to pay for losses or offset the variable in cash flows

98
Q

Proust

A

Subjective

Loss frequency and severity

CRM Chapter 1 (8 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions