Retention is used __________________________________,

• A) Losses are highly predictable
• B) When no other method of treatment is available
• C) The worst possible loss is not serious
• D) All available options

Which of the following can arise in a bank’s assets, liabilities, or off-balance sheet items, through the execution or processing of transactions (either product or service), or through a combination of exposures across these broad categories?

• A) Risk concentration
• B) Mental concentration
• C) Multiplication concentration
• D) Element concentration

A company can determine the maximum retention as a percentage of the firm’s____________________.

• A) Total assets
• B) Net income
• C) Net working capital
• D) Total liabilities

The criteria to be used for the assessment of the bank’s internal capital requirement must be ______________________ available.

• A) Officially
• B) Publicly
• C) Un-officially
• D) Privately

Captive insurer is _______________________ of the parent company.

• A) Banking concern
• B) All available option
• C) Subsidiary
• D) Independent

Which of the following is the condition that increases the chance of loss?

• A) Peril
• B) Indirect (consequential) loss
• C) Hazard
• D) Direct loss

All the dealers and advisors must be registered with _________________________.

• A) Banking regulator
• B) Provincial or territorial regulator
• C) Financial organization
• D) Operational regulator

Who supports a pragmatic approach of mutual recognition for internationally active banks as a key basis for international supervisory co-operation?

• A) The supervisor
• B) The manager
• C) The committee
• D) The shareholder

Which one of the following is not a risk financing tool?

• A) Loss prevention
• B) Commercial insurance
• C) Noninsurance transfer
• D) Retention

Spreading losses incurred by the few over the entire group is a characteristic of _______.

• A) Hedging
• B) Underwriting
• C) Insurance
• D) Gambling

Risk management process contains _____________ steps.

• A) 4
• B) 3
• C) 5
• D) 2

Which of the following situations best explain loss exposure?

• A) The vehicles parked in a monitored parking garage
• B) A plant that may be damaged by an earthquake
• C) The possession of more short-term liabilities than short-term assets
• D) The extension from transportation to games and video stores

The single most important cause of major problems in banks is ___________________________.

• A) Risk tolerance
• B) Diversification
• C) Risk concentration
• D) Risk avoidance

Exposure to a single collateral type is _________________.

• A) Non-risk concentration exposure
• B) Risk collateral exposure
• C) Risk concentration exposure
• D) Risk concentration expense

Which of the following involves risks that are typically uninsurable?

• A) Underwriting
• B) Insurance
• C) Gambling
• D) Hedging

Which of the following is any single exposure or group of exposures with the potential to produce losses large enough to threaten bank’s ability to maintain its core operations?

• A) Mental concentration
• B) Multiplication concentration
• C) Risk concentration
• D) Element concentration

A bank can exercise the _____________when the cost of servicing the outstanding debt exceeds the benefits of the servicing the underlying exposures.

• A) Guarantee
• B) Clean-up calls
• C) Warrantee
• D) Contract

Wherever possible, who should avoid performing redundant and uncoordinated approval and validation work in order to reduce the implementation burden on banks?

• A) Top level managers
• B) Supervisors
• C) Middle level managers
• D) Lower level managers

Which of the following is the process that identifies loss exposures faced by an organization and selects the most appropriate techniques for treating such exposures?

• A) Operations management
• B) Knowledge management
• C) Quality management
• D) Risk management

What is the responsibility of the host country supervisors?

• A) To supervise the entities operating in other countries
• B) To wind up the entities operating in their countries
• C) To wind up the entities operating in other countries
• D) To supervise the entities operating in their countries