exam two related!!

The BIS created a capital requirement for large, global, systemically important banks as part of its global liquidity framework under

The Basel III agreement

After an organization develops and implements its strategic plan, it needs to determine how risk taking will be controlled. Which one of the following statements is correct with respect to risk taking?

A factor in strategic decision making is whether an organization has an advantage in controlling risk with a given activity.

A facility established for the purpose of purchasing income-producing assets from an organization, holding title to them, and then using those assets to collateralize securities that will be sold to investors is

A special purpose vehicle

A court can order a party to refrain from doing a particular activity. This is called

An injunction

During which one of the following stages of the strategic management process would an organization use methods such as Porter's Five Forces Analysis and PESTILE Analysis?

Analyzing Environments

Organizations face strategic risks. Strategic risks

Are systemic risks that are outside the control of any single organization

One of the essential steps in selecting new operators for any motor vehicle is

Finding prospects through advertising, pre-screening, and reviewing applications

Other than with catastrophe put notes, a disadvantage associated with contingent capital arrangements is that

Funds received are loans, not equity

Which one of the following terms refers to a condition that can cause property to deteriorate or destroy itself?

Inherent vice

In a forward contract, the buyer and seller of a commodity

Know its price prior to delivery

Inserted into a contractual agreement, which one of the following provisions limits the amount for which one party might otherwise be liable?

Liquidated damages clause

Liability exposures entail both direct and indirect costs. The former include the cost of settlements and jury awards. Indirect costs include

Loss of market share

If an organization directly securitized its income-producing assets without using a special purpose vehicle (SPV) as an intermediary, investors

Must consider the overall credit risk of the organization

Driver behavior can be monitored by using which one of the following technological advances in fleet safety?

Onboard computers

Which one of the following statements is true regarding operational risk?

Operational risk is integrated in every activity of an organization

Operational risk can be more challenging to manage than cyber risk because

Organizational risk can come from anywhere in the organization

Adverse weather conditions that can threaten the safe delivery of cargo arise from which one of the following environments?

Physical

Radley Contracting Company is installing new signage on the front of a building. George, a passerby walking near the building is injured when a Radley employee accidentally drops a tool from a crane. George likely has the ability to assert which one of the following types of claim?

Premises and operations liability

One category of operational risk includes procedures and practices organizations use to conduct their business activities. This category is

Process risk

Which one of the following major IT risks is likely to arise when an organization's revenue stream falls?

Project back-log

Preventive controls assist the overall control environment of an organization by

Reducing risk of unauthorized actions

Which one of the following statements is true regarding swaps?

Swaps are commonly used to manage interest rate and currency rate of exchange risk

Which one of the following commonly used categories of operational risk includes risks associated with technology and equipment?

Systems

If a business dispute arises between companies who are domiciled in two different countries with dissimilar laws, one issue that must be considered is whether

The chosen court has the right to hear the legal dispute

Which one of the following is true with regards to the IT operational classification risks?

The classification of Availability includes the period of inaccessibility and any restoration period

Altria, one of the world's largest manufacturers and distributors of tobacco products, acquired a 35% stake in Juul Labs, an electronic cigarette company and producer of e-cigarettes. The strategic risk that Altria was trying to address by initiating the purchase of a 35% stake in Juul Labs was ...

They are addressing the declining sales and demand for cigarettes

Clark's Electronics is considering launching new technology for the medical industry. Before investing major resources in the project, the company decided to perform a SWOT analysis. The fact that there are new medical industry regulations pending would fall under which one of the following quadrants of a SWOT analysis?

Threats

In reviewing its business results, Metal Shop, a fabricator of metal tools, discovered that the development costs of new tools far exceed expectations and budget. The root cause of the excess costs is the competition for skilled workers. Skilled tool makers are in demand, and Metal Shop has lost several during the year to competitors, replacing them with new inexperienced tool makers at higher salaries. In a SWOT analysis, how would Metal Shop categorize its inability to maintain skilled tool makers?

Weakness

The importance of systems relationships from a risk control and fleet safety management perspective is that

When a smaller system fails, the larger system of which the smaller system is a part is more likely to fail

Widget Manufacturing board of directors recently adopted a zero-risk tolerance for workplace accidents. Initially the chief risk officer thought this was a great idea, however, he has found it very hard to implement. One reason that a zero-risk tolerance policy is hard to implement is because zero-risk tolerance

Will typically result in risk-based decisions that are too rigid and counter-productive

The catastrophe losses that trigger payment under a catastrophe bond

Can be based on aggregate catastrophe losses over a defined period of time or the occurrence of a single catastrophic event.

Catastrophe bonds

Can be issued for any type of catastrophic insurable risk

An option is an agreement that gives the holder the

Right, but not the obligation, to buy or sell an asset at a specific price over a period of time

When assessing strategic risk, which one of the following represents the amount of risk an organization is willing to take on in order to achieve an anticipated result or return?

Risk appetite

Which one of the following is the method often used to assess IT operational risk?

Scenario analysis

Which one of the following statements is true regarding a generic model of a securitization?

The organization sells income-producing assets to an SPV in exchange for cash