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FRM Part II · FRM Exam Part II · Risk Mitigation

A bank's critical service relies on a single cloud provider. Tests show the following recovery times: application restart 2 hours, database restoration 5 hours (can begin only after the application restart finishes), and reconciliation of data 1 hour (can run in parallel with database restoration but needs the restart complete). The impact tolerance is 6 hours. What is the end-to-end recovery time and does it meet tolerance?

Recovery takes 7 hours, which breaches the 6-hour impact tolerance. The 2-hour restart must finish first, then database restoration of 5 hours and the parallel 1-hour reconciliation run together, so the critical path is 2 plus 5. Summing all three tasks to 8 hours ignores parallelism.

  1. A7 hours; it breaches the toleranceCorrect
  2. B8 hours; it breaches the tolerance
  3. C5 hours; it meets the tolerance
  4. D6 hours; it meets the tolerance

Explanation

Restart takes 2 hours. Then database restoration (5 hours) and reconciliation (1 hour) run in parallel, so the longer path of 5 hours governs: 2 + 5 = 7 hours. This exceeds the 6-hour tolerance. Adding all three gives 8, which ignores parallel work.

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