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FRM Part II · FRM Exam Part II · Case Study: Cyberthreats and Information Security Risks

A firm's business continuity plan relies on a single cloud provider for both production and backup data. Which weakness does this most clearly create for recovery?

This creates concentration risk: a failure or compromise at the single cloud provider could take down both production and backup data, leaving no independent recovery path. Provider certification does not remove third-party dependence, and co-location does not improve recovery objectives.

  1. AConcentration risk, because one provider failure or compromise could disable both production and backupsCorrect
  2. BExcess redundancy that increases recovery time
  3. CReduced RPO because backups are co-located
  4. DElimination of third-party risk because the provider is certified

Explanation

Keeping production and backups with one provider creates a single point of failure and concentration risk. An incident at the provider could affect both, defeating recovery. Certification does not remove third-party risk, and co-location does not improve RPO.

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