Categories of Risk in Financial Systems CT-FT Practice Questions (Page 5)

Questions 21–25

1. 21foundation · easy

   Which risk category is associated with losses arising from failed internal processes, people, or systems?

   • AOperational risk
   • BLiquidity risk
   • CCompliance risk
   • DMarket risk
   Reveal Solution Discussion Select an answer first
2. 22expert · hard

   A financial institution is testing a new cross-border payment system. The system must handle multiple currencies, comply with international regulations, and process transactions in real-time. The testing team has a fixed budget and a tight deadline. They must decide how to allocate testing effort. Which allocation strategy best balances the risk categories involved?

   • AFocus exclusively on regulatory compliance testing, as non-compliance has the highest impact
   • BPrioritize testing of currency conversion and regulatory compliance, with moderate effort on real-time processing
   • CAllocate equal effort to all functional areas to ensure comprehensive coverage
   • DFocus primarily on real-time processing performance, as it affects customer experience
   Reveal Solution Discussion Select an answer first
4. 23foundation · easy

   How does a high level of credit risk typically influence test prioritization in a loan origination system?

   • ATesting focuses on user interface responsiveness
   • BTesting focuses on system backup and recovery procedures
   • CTesting focuses on validating credit scoring and approval workflows
   • DTesting focuses on regulatory reporting accuracy
   Reveal Solution Discussion Select an answer first
5. 24expert · hard

   A bank is testing a new loan origination system. The system calculates credit risk scores, determines interest rates, and generates compliance reports. The testing team has limited time and must decide which areas to test first. The bank has recently been fined for non-compliance with lending regulations. Which area should be prioritized?

   • AInterest rate determination
   • BCredit risk score calculation
   • CUser interface usability
   • DCompliance report generation
   Reveal Solution Discussion Select an answer first
6. 25expert · hard

   A financial institution is testing a new online trading platform that will be accessible to retail investors. The platform will integrate with external market data providers and allow users to execute trades. The testing team has identified that the external market data feed is sometimes delayed or inaccurate. Which testing approach is most effective in mitigating the risk from this external source?

   • AImplement test scenarios that simulate delayed, inaccurate, and missing market data
   • BDelay the project until the external data feed is guaranteed to be accurate
   • CRely on the external provider's testing and do not test data integration
   • DTest the platform only during market hours to ensure real data is used
   Reveal Solution Discussion Select an answer first