FRM 2026 Part II Operational Risk and Resilience Operational Risk Models Free Quiz 1

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FRM 2026 Part II Operational Risk and Resilience Operational Risk Models Free Quiz 1

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FRM 2026 Part II Operational Risk and Resilience Operational Risk Models Free Quiz 1

Practice FRM 2026 Part II Operational Risk and Resilience MCQs from Operational Risk Models. Get instant results with Explanation.

General10 MCQs

1. What are operational risk models?

A. Operational risk models are only used for regulatory reportingB. Operational risk models estimate capital and manage risk using LDA, scenario analysis, and scorecardsC. Operational risk models are the same as credit risk modelsD. Operational risk models are not used in practice

2. What is the loss distribution approach (LDA)?

A. LDA uses only severity distributionsB. LDA uses only frequency distributionsC. LDA combines frequency and severity distributions to estimate the loss distributionD. LDA is not used for operational risk

3. What are frequency and severity distributions in operational risk models?

A. Frequency distribution models the number of events; severity models the size of each eventB. Frequency and severity are the sameC. Frequency models the size of lossesD. Severity models the number of events

4. How is operational risk capital calculated under LDA?

A. Operational risk capital is the expected lossB. Operational risk capital is the average lossC. Operational risk capital is the 95% VaRD. Operational risk capital is the 99.9% VaR over one year

5. What is scenario analysis in operational risk modelling?

A. Scenario analysis is the same as historical simulationB. Scenario analysis uses hypothetical scenarios to assess potential operational lossesC. Scenario analysis is not used in operational riskD. Scenario analysis is only for market risk

General10 MCQs

6. What is the scorecard approach in operational risk modelling?

A. Scorecard approach is purely quantitativeB. Scorecard approach is the same as LDAC. Scorecard approach uses expert judgment and business line assessmentsD. Scorecard approach is not used in practice

7. What is the current Basel approach for operational risk capital?

A. The Basel Committee replaced AMA with a standardised approachB. AMA is still the primary approachC. The standardised approach uses only external dataD. The standardised approach is not risk-sensitive

8. What does the validation of operational risk models involve?

A. Operational risk models do not require validationB. Validation is only for regulatory complianceC. Validation is a one-time exerciseD. Validation includes conceptual soundness, data quality, and performance testing

9. What is the role of external data in operational risk modelling?

A. External data is not used in operational risk modellingB. External data supplements internal data in operational risk modelsC. External data is always more reliable than internal dataD. External data is not available for operational risk

10. How is correlation treated in operational risk models?

A. Operational risk losses are highly correlatedB. Correlation is always included in operational risk modelsC. Correlation is often assumed to be low or ignored in operational risk modelsD. Correlation is not relevant for operational risk

📋 FRM - Test Online Practice Quizzes

FRM

Conducting Body: Global Association of Risk Professionals GARP

Frequency: three times a year: May, August, and November | Time: 240 Minutes

Negative Marking: No

⚡ Test Pattern (Total: 100 MCQs):

Subject breakdown not available.

Merit Formula: -

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