You have to pass the ORM exam to receive the certification from PRMIA. To increase the effectiveness of your study and make you familiar with the actual exam pattern, we have prepared this PRMIA Operational Risk Management sample questions. Our Sample PRMIA Operational Risk Management Practice Exam will give you more insight about both the type and the difficulty level of the questions on the PRMIA Operational Risk Management exam.
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PRMIA Operational Risk Management Sample Questions:
01. A financial institution’s operational risk team identifies that employees frequently fail to report minor operational incidents because they fear disciplinary consequences. Which risk management issue does this situation most clearly indicate?
a) Strong operational resilience capabilities supporting service continuity during disruptions
b) Effective compliance monitoring across regulatory reporting requirements
c) Weak risk culture discouraging transparent reporting of operational risk incidents
d) Excessive operational risk capital allocation across operational business units
02. During a risk and control self-assessment exercise, managers identify a high likelihood of operational errors in a manual reconciliation process. However, they determine that strong automated validation controls significantly reduce potential losses. Which type of risk remains after considering these controls?
a) Residual risk remaining after the effectiveness of operational controls is considered
b) Liquidity risk representing potential funding shortages during market stress
c) Market risk representing potential financial losses from asset price changes
d) Inherent risk representing exposure before any control measures are applied
03. Which factor most commonly introduces bias into operational risk assessments conducted by business units?
a) Internal audit performing periodic reviews of operational risk management procedures
b) Managers understating risks to avoid increased monitoring or additional control requirements
c) Risk management teams providing standardized scoring methodologies for assessments
d) Regulators requiring institutions to report operational loss events to supervisory agencies
04. Which operational resilience principle ensures that organizations can continue delivering critical services despite failures in individual operational components?
a) Designing operational processes with redundancy and alternative service delivery capabilities
b) Eliminating operational risk monitoring responsibilities across business units
c) Delegating operational resilience oversight exclusively to external regulatory authorities
d) Replacing internal control frameworks with insurance coverage arrangements
05. Why is tone at the top considered an essential component of operational risk governance?
a) It allows senior management to bypass governance reporting requirements during crises
b) It determines compensation levels for employees responsible for risk management activities
c) It replaces internal control systems with executive decision-making authority
d) It establishes leadership commitment to ethical conduct and effective risk management practices
06. A bank conducts workshops with business managers to identify risks and evaluate existing controls. Which operational risk tool is most likely being applied?
a) Stress testing methodology applied to credit portfolios under adverse scenarios
b) Risk and Control Self-Assessment used to evaluate operational risks and control effectiveness
c) Value-at-Risk model designed to estimate potential market losses under normal conditions
d) Funds transfer pricing system used to allocate liquidity costs among business units
07. Which practice helps reduce the likelihood of compliance violations within operational processes?
a) Replacing internal compliance frameworks with insurance coverage policies
b) Delegating compliance responsibilities exclusively to external regulators
c) Implementing internal controls designed to prevent and detect regulatory breaches
d) Eliminating formal compliance monitoring procedures across business units
08. An operational risk manager analyzes historical loss data and identifies several large losses caused by employee fraud in trading operations. Which control measure would most effectively reduce this risk?
a) Reducing regulatory reporting requirements across trading operations
b) Increasing operational risk capital reserves held by the institution
c) Replacing internal control procedures with insurance coverage arrangements
d) Implementing segregation of duties and enhanced monitoring of trading activities
09. Which factor most directly strengthens organizational accountability for regulatory compliance?
a) Replacement of internal compliance frameworks with automated reporting systems
b) Clearly defined compliance responsibilities assigned to management and operational staff
c) Delegation of compliance monitoring exclusively to external legal advisors
d) Elimination of compliance oversight responsibilities across business units
10. In an effective operational risk governance structure, which body holds ultimate accountability for approving the institution’s operational risk framework and risk appetite?
a) Internal audit department responsible for evaluating the effectiveness of internal control systems
b) Business line managers responsible for executing daily operational risk management activities
c) Compliance function responsible for interpreting regulatory requirements and reporting breaches
d) Board of Directors responsible for approving enterprise risk strategy and governance oversight
Answers:
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Question: 01 Answer: c |
Question: 02 Answer: a |
Question: 03 Answer: b |
Question: 04 Answer: a |
Question: 05 Answer: d |
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Question: 06 Answer: b |
Question: 07 Answer: c |
Question: 08 Answer: d |
Question: 09 Answer: b |
Question: 10 Answer: d |
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