AI Risk Management AAIA Practice Questions (Page 3)

Questions 11–15

1. 11foundation · easy

   An organization decides to purchase cyber insurance to cover potential losses from a breach involving its AI system. Which risk response strategy does this represent?

   • ARisk acceptance
   • BRisk mitigation
   • CRisk avoidance
   • DRisk transfer
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2. 12foundation · easy

   Which of the following best describes the purpose of a qualitative risk assessment for an AI system?

   • ATo eliminate the need for expert judgment in risk assessment
   • BTo assign monetary values to potential losses
   • CTo use descriptive scales to rate the likelihood and impact of risks
   • DTo calculate the expected monetary value of a risk
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4. 13foundation · easy

   Why is it important to align AI risk management with the organization's enterprise risk management (ERM) framework?

   • ATo eliminate the need for a separate AI risk management process
   • BTo ensure that AI risks are considered in the context of the organization's overall risk appetite and objectives
   • CTo isolate AI risks from other business risks
   • DTo transfer AI risks to the ERM framework
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5. 14expert · hard

   A global bank is deploying an AI system for anti-money laundering (AML) transaction monitoring. The system has a high false-positive rate, causing operational burden. The risk team must decide on a risk response. The bank's risk appetite allows for some false positives but not for missing true positives. Which response best balances operational efficiency and regulatory risk?

   • AAvoid the risk by discontinuing the AI system and using manual transaction monitoring.
   • BTransfer the risk to an external AML service provider that guarantees lower false positives.
   • CAdjust the model threshold to reduce false positives, while implementing a secondary review process for lower-confidence alerts.
   • DAccept the high false-positive rate as a cost of compliance, since missing a true positive is worse.
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6. 15application · medium

   An e-commerce company uses AI for dynamic pricing. The risk team has identified that the model may occasionally set prices that violate consumer protection laws. They need to establish a monitoring and reporting mechanism. Which approach is most effective?

   • AHave the data science team review the model's pricing outputs weekly and share the results in a team meeting.
   • BImplement real-time monitoring of pricing decisions against regulatory thresholds, with automated alerts to the compliance team and monthly reports to the AI risk committee.
   • CConduct a quarterly audit of pricing logs by the internal audit team, with findings reported to the CEO.
   • DRely on customer complaints to identify pricing violations, and address them as they arise.
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