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NEW QUESTION: 1
Click the Exhibit button.
Which two statements are true regarding the output shown in the exhibit? (Choose two.)
A. Both ESIs are generated from the router ID.
B. Both ESIs use the same VNI.
C. The ESI 05:00:00:fe:4d:00:00:56:0e:00 is an auto-generated ESI.
D. The ESI 00:24:24:24:24:24:24:24:24:24 is an auto-generated ESI.
Answer: B,C
NEW QUESTION: 2
When compared to a high severity low frequency risk, the operational risk capital requirement for a low severity high frequency risk is likely to be:
A. Lower
B. Unaffected by differences in frequency or severity
C. Zero
D. Higher
Answer: A
Explanation:
Explanation
High frequency and low severity risks, for example the risks of fraud losses for a credit card issuer, may have high expected losses, but low unexpected losses. In other words, we can generally expect these losses to stay within a small expected and known range. The capital requirement will be the worst case losses at a given confidence level less expected losses, and in such cases this can be expected to be low.
On the other hand, medium severity medium frequency risks, such as the risks of unexpected legal claims,
'fat-finger' trading errors, will have low expected losses but a high level of unexpected losses. Thus the capital requirement for such risks will be high.
It is also worthwhile mentioning high severity and low frequency risks - for example a rogue trader circumventing all controls and bringing the bank down, or a terrorist strike or natural disaster creating other losses - will probably have zero expected losses & high unexpected losses but only at very high levels of confidence. In other words, operational risk capital is unlikely to provide for such events and these would lie in the part of the tail that is not covered by most levels of confidence when calculating operational risk capital.
Note that risk capital is required for only unexpected losses as expected losses are to be borne by P&L reserves. Therefore the operational risk capital requirements for a low severity high frequency risk is likely to be low when compared to other risks that are lower frequency but higher severity.
Thus Choice 'c' is the correct answer.
NEW QUESTION: 3
This type of control is used to ensure that transactions are properly entered into the system once.
Elements of this type of control may include counting data and time stamping it with the date it was entered or edited?
A. Processing Controls
B. Input/Output Controls
C. Input Controls
D. Output Controls
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Transaction controls are used to provide control over the various stages of a transaction - from initiation, to output, through testing and change control.
Input Controls are a type of transaction control.
Input controls are used to ensure that transactions are properly input into the system only once. Elements of input controls may include counting the data and timestamping it with the date it was entered or edited.
Incorrect Answers:
A: Processing controls are used to guarantee that transactions are valid and accurate and that wrong entries are reprocessed correctly and promptly. This is not what is described in the question.
B: Output controls are used for two things - for protecting the confidentiality of an output, and for verifying the integrity of an output by comparing the input transaction with the output data. Elements of proper output controls would involve ensuring the output reaches the proper users, restricting access to the printed output storage areas, printing heading and trailing banners, requiring signed receipts before releasing sensitive output, and printing "no output" banners when a report is empty. This is not what is described in the question.
D: Input/Output Controls are not a defined control type.
References:
Krutz, Ronald L. and Russell Dean Vines, The CISSP Prep Guide: Mastering the CISSP and ISSEP Exams, 2nd Edition, Wiley Publishing, Indianapolis, 2004, p. 303
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