RIMS CRMP EXAM (LATEST EXAM 2025) | COMPLETE QUESTIONS WITH CORRECT ANSWERS | GRADED A+, Exams of Credit and Risk Management

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RIMS CRMP EXAM (LATEST EXAM 2025) |

COMPLETE QUESTIONS WITH CORRECT

ANSWERS | GRADED A+ | NEWEST EXAM |

VERIFIED ANSWERS

A risk management professional evaluates which type of key external force to gain insight about another company's strengths and weaknesses? A. Political B. Competitive C. Economic D. Technological ---------CORRECT ANSWER-----------------B. Competitive A timeline is included in the A. Risk implementation plan B. Risk governance structure C. Risk management framework D. Risk monitoring metrics ---------CORRECT ANSWER-----------------A. Risk implementation plan The three components that make up the risk assessment phase of the risk management process are A. Establishing the context, risk evaluation, and risk treatment B. Establishing the context, risk identification, and risk evaluation C. Risk identification, risk analysis, and risk evaluation D. Risk identification, risk analysis, and risk treatment ---------CORRECT ANSWER-----------------C. Risk identification, risk analysis, and risk evaluation

When working with risk owners to develop risk treatment, it is necessary to A. Consider risks equally B. Consider risk within the context of the business C. Generate a positive return on investment in the current year D. Seek approval from the Board of Directors ---------CORRECT ANSWER- ----------------B. Consider risk within the context of the business The risk management professional should prioritize information about the business model based on A. Industry trends B. Annual reports C. Analyst reviews D. Strategic objectives ---------CORRECT ANSWER-----------------D. Strategic objectives When seeking to advise the organization on risks, the risk management professional should try to adopt what type of relationship model? A. Compliance B. Operational C. Partnership D. Sales ---------CORRECT ANSWER-----------------C. Partnership Which of the following would signal a potential change in an organization's risk context? A. The organization acquires a new business B. The organization changes insurance brokers C. The organization's board of directors reviews a compliance report D. The organization publishes its annual report ---------CORRECT ANSWER-----------------A. The organization acquires a new business

D. identify threats and opportunities ---------CORRECT ANSWER-------------- ---D. identify threats and opportunities When measuring the financial effectiveness of an organization's risk management plan, the risk management professional should _______________. A. determine the overall cost of risk B. exclude risk financing costs C. involve the risk management committee D. determine the maximum level of uncertainty the organization can tolerate ---------CORRECT ANSWER-----------------A. determine the overall cost of risk How can an ERM heat map help to facilitate discussion for a risk committee? A. It provides a risk register for an organization to be able to review all risks. B. It identifies how mitigation efforts could affect frequency and severity of a risk. C. It provides a map for insurance companies to price an organization's premiums. D. It can help benchmark risks for comparison with others in the industry --- ------CORRECT ANSWER-----------------B. It identifies how mitigation efforts could affect frequency and severity of a risk. A success criterion for a risk management program includes A. Risk accountability B. Dependencies C. Organizational structure D. Performance ---------CORRECT ANSWER-----------------A. Risk accountability

Which of the following is the BEST example of a reason to revise a risk management program? A. A new exposure arises such as a new merger or acquisition B. Significant turnover within the risk management function C. New product offerings by the insurance industry D. A revision of a company's annual earnings forecast ---------CORRECT ANSWER-----------------A. A new exposure arises such as a new merger or acquisition A potential DISADVANTAGE of benchmarking is that it A. May limit the type of information obtained if it only considers organizations viewed as a direct competitor B. Focuses primarily on areas of overlap in product or services and does not consider areas in which organizations differ C. Focuses primarily on company best practices and cannot be used to identify areas for possible innovation D. Does not provide useful information about industry and market trends --- ------CORRECT ANSWER-----------------A. May limit the type of information obtained if it only considers organizations viewed as a direct competitor Which industry environmental factors create uncertainty for an organization? A. Demand and competition B. Cultural factors C. Transportation and infrastructure D. Historical claims experiences ---------CORRECT ANSWER----------------- A. Demand and competition

The purpose of documenting business model uncertainties is to A. Prioritize the impact of residual risks B. Conduct a review of the enterprise risk management framework C. Disqualify a business case to support loss control measures D. Provide a tangible resource for the design of risk strategies --------- CORRECT ANSWER-----------------D. Provide a tangible resource for the design of risk strategies What is one KEY advantage that can be used to obtain organizational support for adopting an enterprise risk management strategy? A. Increased capital flows associated with increased risk controls B. Reduced scrutiny from management or oversight boards C. Improved effectiveness of safety and security practices D. Reduced governance costs through increased control efficiency --------- CORRECT ANSWER-----------------D. Reduced governance costs through increased control efficiency As the concept of organizational resilience evolves, what is ONE critical challenge to communicating and implementing a sustainable process? A. Economic cost of implementing a resilient program design B. Resilience across and between organizational cultures C. Market recognition of resilience program effectiveness D. Ensuring alignment between resilience program design and execution when needed ---------CORRECT ANSWER-----------------B. Resilience across and between organizational cultures A business model is a set of assumptions about the ______

A. financial stability of an organization B. organizational structure of a business C. products and services past performance D. way an organization creates value ---------CORRECT ANSWER------------ -----D. way an organization creates value What two analytical tools are particularly useful in analyzing the business model? A. Key performance indicators and total cost of risk B. Key risk indicators and gap analysis C. Pareto analysis and root cause analysis D. Value chain analysis and benchmarking ---------CORRECT ANSWER---- -------------D. Value chain analysis and benchmarking Risk management professionals conduct supply-chain analyses to identify _______________. A. contingent business interruption coverage B. customer technology needs C. international regulatory requirements D. potential vulnerabilities to the organization ---------CORRECT ANSWER- ----------------D. potential vulnerabilities to the organization Which activity does the risk management professional perform immediately after obtaining internal and external information about the organization? A. analyze the information B. organize the information C. prioritize the information D. report the information ---------CORRECT ANSWER-----------------B. organize the information

C. an analysis of the organization's total cost of insurable risk D. the development of timelines for implementing the risk strategy --------- CORRECT ANSWER-----------------A. a review of the goals and objectives of the risk strategy Which of the following BEST guides an organization's risk management decision-making process? A. risk financing opportunities B. risk retention levels C. risk strategy approach D. risk treatment options ---------CORRECT ANSWER-----------------C. risk strategy approach An effective risk communication strategy requires the selection of appropriate _______________. A. coaches B. data points C. media channels D. metrics ---------CORRECT ANSWER-----------------C. media channels Which of the following is considered a risk analysis technique? A. budget allocation B. consensus building C. insurance placement D. Monte Carlo simulation ---------CORRECT ANSWER-----------------D. Monte Carlo simulation When an operational area develops a treatment for a critical risk, the risk management professional MUST _______________.

A. add the risk to the risk map B. communicate the treatment plan directly with internal audit C. evaluate the dollar savings associated with the treatment D. evaluate the impact upon other areas ---------CORRECT ANSWER-------- ---------D. evaluate the impact upon other areas A risk management professional advises management on the status of key risks by _______________. A. annually identifying the inventory of risks B. providing information about competitors' risk management plan C. providing insights into the changing characteristics of a risk D. summarizing internal audit reports ---------CORRECT ANSWER------------ -----C. providing insights into the changing characteristics of a risk STEEP is a method used for strategic planning. The acronym STEEP stands for _______________. A. security, technical, emerging, external, profit B. social, technological, economic, environmental, political C. standard, technique, enterprise, environmental, process D. social, theory, external, engaging, program ---------CORRECT ANSWER-----------------B. social, technological, economic, environmental, political Once risks have been analyzed, the risk management professional should evaluate the risks against the risk _______________. A. appetite B. monitoring plan C. treatment D. underwriting criteria ---------CORRECT ANSWER-----------------A. appetite

D. Working with a large group ---------CORRECT ANSWER-----------------B. Working with a diverse group To gain greater insight on the effects of uncertainty on organizational objectives, the risk management professional A. Has a strong incentive to consult and communicate organizational risks B. Should consult with key risk stakeholders C. Should focus on identifiable risks D. Has a duty to inform when risks are outside of a risk tolerance --------- CORRECT ANSWER-----------------B. Should consult with key risk stakeholders An effective way for a risk management professional to analyze operations of an organization is to form a A. Risk committee B. Captive insurance company C. Risk management department D. Template to gather information ---------CORRECT ANSWER----------------

• A. Risk committee Before a decision is made, which of the following issues should ALWAYS be escalated to higher level risk committees, management committees, or the Board? A. Those that are important but lack critical information B. Those that are overly complex and not well understood C. Those that exceed the authority of the intended decision maker or decision-making body D. Those that fall within the authority of the intended decision maker or decision-making body ---------CORRECT ANSWER-----------------C. Those that exceed the authority of the intended decision maker or decision- making body

Benchmarking ---------CORRECT ANSWER-----------------Benchmarking: The process of measuring the performance of an organization against external standards of reference that frequently come from similar organizations doing similar things. Corporate governance ---------CORRECT ANSWER-----------------Corporate governance: The system of rules, practices, and processes by which a company is directed and controlled Enterprise risk management ---------CORRECT ANSWER----------------- Enterprise risk management: A strategic discipline that supports the achievement of an organization's objectives by addressing the full spectrum of its risk and managing the combined impact of those risks as an interrelated risk portfolio. Gap analysis ---------CORRECT ANSWER-----------------Gap analysis: Comparison of an existing process or procedure (current state-what is) to a desired, future state (what should be) in order to identify deficiencies or excesses in the existing process (what to consider). Key performance indicator (KPI) ---------CORRECT ANSWER----------------- Key performance indicator (KPI): Measure(s) of deviations from expected outcomes to help a firm see how it is performing. Key risk indicator (KRI) ---------CORRECT ANSWER-----------------Key risk indicator (KRI): Leading indicator(s) of risk to business performance, giving early warning about potential risks.

understand, discuss, and act on the risk(s) the organization confronts and takes Risk champion ---------CORRECT ANSWER-----------------Risk champion: Any person in an organization who is a leader and influences peers regarding the value that risk management adds to the organization. Risk governance ---------CORRECT ANSWER-----------------Risk governance: Encompasses the oversight, practices and respective roles and responsibilities for risk within an organization's unique corporate governance. Risk management ---------CORRECT ANSWER-----------------Risk management: Coordinated activities to plan, direct, control and make decisions concerning the effects of uncertainty on objectives. Risk owner ---------CORRECT ANSWER-----------------Risk owner: An individual accountable for the identification, assessment, treatment, and monitoring of risks in a specific environment. Risk portfolio ---------CORRECT ANSWER-----------------Risk portfolio: A broad collection and range of uncertainties that can affect an organization's future. Risk tolerance ---------CORRECT ANSWER-----------------Risk tolerance: The amount of uncertainty an organization is prepared to accept in total or more narrowly within a certain business unit, a particular risk category or for a specific initiative.

Root cause ---------CORRECT ANSWER-----------------Root cause: Underlying or initiating risk source or driver that produces certain outcomes or changes the impact of an outcome or outcomes. Commonly used to describe the point in a chain of events or conditions where an intervention could reasonably be implemented to improve performance or prevent an undesirable outcome. Strategic risk management (SRM) ---------CORRECT ANSWER----------------

• Strategic risk management (SRM): A business discipline that drives deliberation and action regarding uncertainties and untapped opportunities that affect an organization's strategy and strategy execution Root cause analysis ---------CORRECT ANSWER-----------------Root cause analysis: Multiple risk assessment techniques and approaches, at times applied in a series, which are designed to identify the underlying or initiating risk source(s) or driver(s). SWOT analysis ---------CORRECT ANSWER-----------------SWOT analysis: SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats and is an analytical approach for environmental scanning that combines internal and external context with obstacles and accelerators to success in achieving objectives. Value chain ---------CORRECT ANSWER-----------------Value chain: A high- level model developed by Michael Porter used to describe the process by which businesses receive raw materials, add value to the raw materials through various processes to create a finished product, and then sell that end product to customers.

The type of decision being made; Who should be included in the decision making process; Where in the process decisions are being made --------- CORRECT ANSWER-----------------To embed risk management in both routine and strategic decision, what should managers be able to recognize? Meeting or exceeding an organization's objectives Adhering to control-based objectives, rules and/or controls Complying with regulatory requirements ---------CORRECT ANSWER-------- ---------Risk management strategies' general focus Risk identification, assessment and treatment through audit plans with focus on fraud, corruption, regulatory noncompliance and/or misrepresentation related to the organization's internal control systems, financial operations, financial statements and reporting as well as enterprise risk and the organization's risk management framework and process. ---------CORRECT ANSWER-----------------Support Function: Internal Audit Include risk assessment in planning process; Leverage cross-functional risk assessment team and subject matter experts to identify enterprise risks; Consider cascading and cumulative effects ---------CORRECT ANSWER---- -------------What steps can the risk management professional take to embed risk management in decision making? Technique that can be used to determine what steps might need to be taken to improve the organization's capacity to move from a current state to a desired future state. ---------CORRECT ANSWER-----------------Gap Analysis

The total exposed amount that an organization wishes to undertake on the basis of risk-return trade-offs for one or more desire and expected outcomes. ---------CORRECT ANSWER-----------------Risk appetite Risk management professional's role in Implementing Risk Strategies ------- --CORRECT ANSWER-----------------Communication and Consultation Risk identification, assessment and treatment of risks related to the obligation an organization undertakes and transfers through contracting, as well as its compliance with applicable laws and regulatory obligations. ------- --CORRECT ANSWER-----------------Support Function: Legal Program not integrated into strategy or its execution; Focused on the wrong risks; Not executed in a repeatable process; Risk management is practiced in a silo; Activity not viewed as being value added ---------CORRECT ANSWER-----------------What are the typical failures in risk management which can be avoided if it is embedded in the decision making process? Determines that actions the organization will take at any stage of the planning period as circumstances change. ---------CORRECT ANSWER----- ------------Strategic Plan The individual who is ultimately accountable for ensuring that risk is managed appropriately, including the implementation of selected responses. ---------CORRECT ANSWER-----------------Risk owner