FRM 2026 Part I Foundations of Risk Management Enterprise Risk Management Free Quiz 1

Practice FRM 2026 Part I Foundations of Risk Management MCQs from Enterprise Risk Management. Get instant results with Explanation.

General10 MCQs

1. What is Enterprise Risk Management (ERM)?

A. ERM is only about financial risksB. ERM is a holistic approach that integrates risk management with strategy and performanceC. ERM is the same as complianceD. ERM is not used in practice

2. What is the COSO ERM framework?

A. COSO ERM has three componentsB. COSO ERM is only for financial institutionsC. COSO ERM has five components: governance, strategy, performance, review, and communicationD. COSO ERM is the same as the internal control framework

3. What is ISO 31000?

A. ISO 31000 provides principles and guidelines for risk managementB. ISO 31000 is a mandatory standard for all organisationsC. ISO 31000 only applies to financial institutionsD. ISO 31000 is the same as COSO ERM

4. What types of risks does ERM cover?

A. ERM only covers financial risksB. ERM does not cover strategic risksC. ERM is only for large corporationsD. ERM covers strategic, financial, operational, and compliance risks

5. What is a risk appetite statement?

A. The risk appetite statement is optionalB. The risk appetite statement articulates the organisation's willingness to accept riskC. The risk appetite statement is the same as the risk registerD. The risk appetite statement is only for external reporting

General10 MCQs

6. What is risk aggregation in ERM?

A. Risk aggregation is the same as risk identificationB. Risk aggregation ignores correlations between risksC. Risk aggregation combines individual risks to understand overall exposureD. Risk aggregation is only for financial risks

7. What is the role of the board and senior management in ERM?

A. The board and senior management play a critical role in ERMB. ERM is solely the responsibility of the risk managerC. The board has no role in ERMD. Senior management is not involved in ERM

8. Why is risk culture important for ERM?

A. Risk culture is not relevant to ERMB. Risk culture is the same as risk appetiteC. Risk culture is only for large organisationsD. Risk culture is a critical success factor for ERM

9. How does ERM relate to strategic planning?

A. ERM is separate from strategic planningB. ERM should be integrated with strategic planningC. Strategic planning does not consider risksD. ERM is only for operational planning

10. How does ERM support capital allocation?

A. ERM is not used for capital allocationB. Capital allocation is separate from ERMC. ERM provides a framework for capital allocation based on riskD. Capital allocation is only for large organisations

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