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FRM P2 - operational risk

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 As the inexperienced global head of operational risk for DEF Financial Services, you are trying to make a decision about how to quantify your firm's operational risk exposure. You've decided the best combination of methodologies to use would be factor-based models and the capital asset pricing model. Now, 6 months after you've implemented your approach you've identified some major limitations in your decision on the methodologies to use. Which of the following best describes those limitations?

I. You are unable to reliably predict an operational risk event on a detailed level.

II. Collecting and aggregating consistent data across the firm is challenging.

III. You are unable to capture interdependencies between areas of your firm.

IV. You are unable to reliably forecast general trends in operational risk events.

A. I and III

B. II and IV

C. I, II and III

D. II, III and IV

asked Sep 14, 2017 by anonymous
edited Sep 15, 2017 by Concepts n Clarity

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