PRMIA Exam 8010 Topic 7 Question 61 Discussion

Actual exam question for PRMIA's Operational Risk Manager (ORM) Exam exam

Question #: 61
Topic #: 7

[All Operational Risk Manager (ORM) Exam Questions]

A risk management function is best organized as:

Aintegrated with the risk taking functions as risk management should be a pervasive activity carried out at all levels of the organization.

Breport independently of the risk taking functions

Creporting directly to the traders, as to be closest to the point at which risks are being taken

Da part of the trading desks and other risk taking teams

Show Suggested Answer

Suggested Answer: B

The point that this question is trying to emphasize is the independence of the risk management function. The risk function should be segregated from the risk taking functions as to maintain independence and objectivity.

Choice 'd', Choice 'c' and Choice 'a' run contrary to this requirement of independence, and are therefore not correct. The risk function should report directly to senior levels, for example directly to the audit committee, and not be a part of the risk taking functions.

by Darci at Sep 13, 2024, 02:43 AM

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Stacey

10 days ago

I see both sides, but I think it should report directly to the traders for better communication and decision-making.

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Mona

10 days ago

I'm going with B. Gotta keep those risk managers on a tight leash, am I right?

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Mila

17 days ago

I disagree, I believe it should report independently of the risk taking functions to maintain objectivity.

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Kami

18 days ago

Haha, option D - 'a part of the trading desks'? Might as well just let the foxes guard the henhouse!

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Krissy

23 days ago

C'mon, option C? Letting the traders manage their own risk? That's a recipe for disaster!

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Lisandra

25 days ago

I disagree, option B is the way to go. Risk management needs to be independent to provide objective oversight.

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Kallie

9 hours ago

I agree with you, it's important for risk management to be pervasive throughout the organization.

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Laura

8 days ago

I think option A is better, risk management should be integrated with the risk taking functions.

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Golda

26 days ago

Option A makes the most sense. Risk management should be integrated throughout the organization, not siloed off.

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Angella

19 days ago

I think it's important for risk management to be a pervasive activity carried out at all levels of the organization.

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Aleisha

22 days ago

I agree, having risk management integrated with the risk taking functions makes the most sense.

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Harris

27 days ago

I think the risk management function should be integrated with the risk taking functions.

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