Chapter 16 Flashcards
1
Q
Operational risk
A
risk of direct/indirect losses, either from external events w/ impact to org’s ops, or inadequate/failed internal processes, people, systems
2
Q
Legal and regulatory/compliance risk
A
MOST LIKELY to be able to be reduced using risk transfer strategies
3
Q
value at risk (VaR)
A
4
Q
Monte Carlo simulation
A
- uses historical experience to determine probability distrib. for multiple variables
- runs multiple tests using different amounts for each variable
- results in summary statistics
- key values of interest: min., max., mean, and median values
5
Q
contingency business resumption plan
A
primarily addresses mgmt./ recovery from impacts of t_errorism and natural disasters*_
*Natural disasters (e.g. range from temp. power outage - major earthquake)
6
Q
Fidelity risk
A
theft of money, securities or property by an employee
