Skip to content

FRM Part II · FRM Exam Part II · Introduction to Operational Risk and Resilience

Under the three lines model commonly used in operational risk governance, which activity belongs to the second line?

The second line independently challenges business units' risk assessments and sets operational risk policies and the framework. The first line owns and manages the risks day to day, while internal audit as the third line gives independent assurance to the board.

  1. AOwning and managing risks in day-to-day business processes
  2. BIndependently challenging business units' risk assessments and setting operational risk policiesCorrect
  3. CProviding independent assurance to the board on the effectiveness of governance and controls
  4. DExecuting trades within approved limits

Explanation

The second line (independent operational risk management function) sets the framework and policies, and provides oversight and challenge. The first line owns and manages risk. Independent assurance to the board is the role of internal audit, the third line.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Operational Risk and Resilience shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to Operational Risk and ResilienceFree diagnostic mock

More Introduction to Operational Risk and Resilience questions