Risk Management (Week 7) Operational Risk Management

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What makes it challenging to estimate the frequency and severity of operational risks?

Lack of expert judgment

Subjectivity and lack of data (correct)

Constant reassessment in light of changes

Intangible nature of some risks

What introduces subjectivity in assessing operational risks?

Regulatory landscape

Expert judgment (correct)

Changes in the external environment

Quantification of intangible risks

Why are operational risks challenging to measure consistently over time?

Different expert opinions

Subjectivity and lack of data

Quantification of intangible risks

Constant reassessment in light of changes (correct)

What type of risks involve factors that are extremely difficult to quantify in financial terms?

Intangible risks like reputation damage Signup and view all the answers

What is the aim of risk management in project settings?

To identify, assess, and prioritize risks Signup and view all the answers

Which factor can cause a project to deviate from its planned objectives, timeline, or budget?

Unforeseen events or conditions Signup and view all the answers

During which phase of the project life cycle is the project plan put into action?

Project Execution Signup and view all the answers

What is the main purpose of the risk register in project management?

To continually update risks Signup and view all the answers

What key activity should management reports provide in relation to project risks?

Visibility on risks faced Signup and view all the answers

Which phase of the project life cycle involves assessing the project's viability through a feasibility study?

Project Inception Signup and view all the answers

What activity occurs during the Project Closure phase of a project?

Handover to stakeholders Signup and view all the answers

Why is ongoing updating of the risk register necessary in project management?

To monitor and adapt to emerging risks Signup and view all the answers

What is the main purpose of Risk Monitoring and Control in project management?

Identify new risks and evaluate risk responses effectiveness Signup and view all the answers

Why is communication important in project risk management?

To foster a common understanding among stakeholders Signup and view all the answers

How does project risk management help in enhancing decision making?

It provides a structured approach considering uncertainty in decisions Signup and view all the answers

What is the primary goal of project risk management according to the text?

Increase the likelihood of achieving project goals by managing risks Signup and view all the answers

What does uncertainty in projects refer to?

The inability to predict events affecting project outcomes Signup and view all the answers

Why is it essential to continuously monitor risks in a project?

To identify new risks as the project progresses Signup and view all the answers

What is the primary objective of Operational Risk Management?

To control and minimize operational risks Signup and view all the answers

What are some examples of operational risks in the manufacturing sector?

Equipment failures and quality control issues Signup and view all the answers

Which of the following is a regulatory requirement for banks?

Financial regulations like the Basel Accords Signup and view all the answers

Which of the following is a common risk mitigation strategy for manufacturing companies?

Quality control measures Signup and view all the answers

How do operational risks differ between banks and manufacturing companies?

Operational risks differ in nature and impact between the two sectors Signup and view all the answers

What is the main purpose of regulatory compliance in the context of operational risk management?

To minimize operational risks Signup and view all the answers

Which part of operational risk management involves the ongoing process of handling the risks?

OPERATIONAL RISK MANAGEMENT & MONITORING Signup and view all the answers

What makes operational risks difficult to identify and quantify?

Their highly complex and interdependent nature Signup and view all the answers

What is the purpose of operational risk reporting and insights?

To provide information about risks and how they're being managed Signup and view all the answers

What is the role of operational data and technology in risk management?

To make risks more visible and easier to understand Signup and view all the answers

What is the main challenge in measuring operational risk?

Lack of historical data Signup and view all the answers

What is the first step in operational risk assessment and measurement?

Identifying, sizing up, and prioritizing risks Signup and view all the answers