FRM 2026 Part I Foundations of Risk Management Systemic Risk Free Quiz 2

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

General10 MCQs

1. What is the shadow banking system and its role in systemic risk?

A. Shadow banking can contribute to systemic riskB. Shadow banking is not a source of systemic riskC. Shadow banking is the same as traditional bankingD. Shadow banking is regulated like traditional banks

2. What is the too-big-to-fail problem?

A. Too-big-to-fail is not a problemB. Too-big-to-fail only applies to non-financial companiesC. Too-big-to-fail reduces moral hazardD. Too-big-to-fail creates moral hazard and is a systemic risk concern

3. What is resolution planning in systemic risk?

A. Resolution planning is optionalB. Resolution planning helps reduce systemic risk by enabling orderly resolutionC. Resolution planning is only for small banksD. Resolution planning is not effective

4. What is the role of central clearing houses (CCPs) in systemic risk?

A. CCPs do not reduce systemic riskB. CCPs are not used in financial marketsC. CCPs reduce counterparty risk but can also become a source of systemic risk if they failD. CCPs are only for derivatives

5. What is the role of the IMF and BIS in systemic risk?

A. The IMF and BIS monitor and address systemic riskB. The IMF and BIS are not involved in systemic riskC. The IMF only addresses credit riskD. The BIS only addresses market risk

General10 MCQs

6. How is climate change related to systemic risk?

A. Climate change is not a systemic riskB. Climate change only affects certain industriesC. Climate change is not considered by regulatorsD. Climate change is emerging as a source of systemic risk

7. What regulatory changes were made after the 2008 crisis to address systemic risk?

A. The 2008 crisis led to no regulatory changesB. The 2008 crisis led to the creation of systemic risk regulators like FSOC and ESRBC. The 2008 crisis reduced systemic riskD. The 2008 crisis was caused by systemic risk, but no reforms were implemented

8. What is the systemic risk buffer (SyRB)?

A. The SyRB is the same as the countercyclical capital bufferB. The SyRB is optionalC. The SyRB requires additional capital to mitigate systemic riskD. The SyRB is only for large banks

9. How is cyber risk related to systemic risk?

A. Cyber risk is a growing source of systemic riskB. Cyber risk only affects individual institutionsC. Cyber risk is not a systemic riskD. Cyber risk is not considered by regulators

10. How is systemic risk monitored?

A. Systemic risk cannot be monitoredB. Systemic risk is monitored only through qualitative judgmentC. Systemic risk is monitored only through quantitative modelsD. Systemic risk is monitored using a combination of quantitative and qualitative methods

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