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Risk Management
FRM Part II Operational Risk and Resilience Exam Preparation
Study operational-risk governance, identification, controls, resilience, cyber and third-party risk, model risk, stress testing, capital and Basel reforms.
100 Practice Questions Detailed Study Notes Timed topic practice
Course syllabus information reviewed for 2026. Exams Academy is an independent education provider and is not affiliated with GARP.
Exactly what is included
- 100 practice questions across 5 mock exams · unlimited retakes
- Focus Learn · key areas, pitfalls, exam traps & key numbers
- Flashcards · fun, fast and effective recall
- Exam cheat sheet · key facts, rules and numbers by chapter
- Audio Learning · every chapter in audio
- AI Analyzer & Mentor · pinpoints your weak areas
- Study Mode Exams · learn while you train
- AI Chat trained specifically for this exam
- Study material organised by syllabus
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Syllabus
Module 1: Introduction to Operational Risk and Resilience
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Scope, boundaries, frameworks, risk features and operational resilience.
- • Operational-risk definition
- • ORM cycle
- • Impact tolerance
Module 2: Risk Governance
Prudential regulation, board oversight, three lines, appetite and culture.
- • PSMOR
- • Risk appetite
- • Risk culture
Module 3: Risk Identification
Top-down and bottom-up tools, scenarios, taxonomies and risk inventories.
- • Process mapping
- • Scenario analysis
- • Cause-event-impact
Module 4: Risk Measurement and Assessment
Loss data, RCSA, KRIs, factor methods, scenarios and operational-risk capital.
- • RCSA
- • FAIR and bowtie
- • LDA
Module 5: Risk Mitigation
Risk responses, controls, process design, continuity, crisis management and transfer.
- • Control types
- • Control testing
- • BCM and insurance
Module 6: Risk Reporting
Internal audiences, risk profiles, combined assurance and external disclosure.
- • Board reporting
- • Data aggregation
- • Pillar 3
Module 7: Integrated Risk Management
ERM, appetite, regulatory and economic capital, RAROC and stress testing.
- • Risk aggregation
- • RAROC
- • Reverse stress testing
Module 8: Cyber-Resilience: Range of Practices
Cyber governance, architecture, testing, response, sharing and third parties.
- • Cyber lifecycle
- • Incident response
- • Provider dependency
Module 9: Case Study: Cyberthreats and Information Security Risks
Cyber frameworks, protection, monitoring and the Equifax breach.
- • Vulnerability management
- • Defense in depth
- • Incident lessons
Module 10: Sound Management of Risks Related to Money Laundering and Financing of Terrorism
Risk assessment, customer acceptance, due diligence, monitoring and group-wide controls.
- • Beneficial ownership
- • Customer risk profile
- • Suspicious reporting
Module 11: Case Study: Financial Crime and Fraud
Fraud drivers, prevention, monitoring, investigation and remediation.
- • Internal and external fraud
- • Case management
- • Root cause
Module 12: Guidance on Managing Outsourcing Risk
Due diligence, contracts, monitoring, continuity, concentration and exit.
- • Provider assessment
- • Contract controls
- • Exit strategy
Module 13: Case Study: Third-Party Risk Management
Inventory, criticality, residual risk, cloud dependency and provider incidents.
- • Fourth parties
- • SLA monitoring
- • Termination assistance
Module 14: Case Study: Investor Protection and Compliance Risks in Investment Activities
Suitability, conflicts, execution, product governance, client assets and surveillance.
- • Investor protection
- • Market conduct
- • Compliance remediation
Module 15: Supervisory Guidance on Model Risk Management
Development, implementation, use, validation, governance and model inventory.
- • Conceptual soundness
- • Outcomes analysis
- • Independent validation
Module 16: Case Study: Model Risk and Model Validation
Copula, spreadsheet and unit-error cases and their governance lessons.
- • Tail assumptions
- • End-user computing
- • Data and units
Module 17: Stress Testing Banks
Scenario design, loss and revenue models, balance sheet, capital and disclosure.
- • PPNR
- • Management actions
- • Use test
Module 18: Risk Capital and RAROC
Risk capital, capital budgeting, performance, PIT/TTC, hurdle rates and diversification.
- • RAROC
- • Confidence level
- • Capital allocation
Module 19: Range of Practices and Issues in Economic Capital Frameworks
Governance, tail measures, aggregation, validation and attribution.
- • VaR and expected shortfall
- • Dependence
- • Capital attribution
Module 20: Capital Planning at Large Bank Holding Companies
Risk identification, controls, policy, scenarios, projections and capital adequacy.
- • Capital goals
- • Scenario severity
- • Projection aggregation
Module 21: Capital Regulation Before the Global Financial Crisis
Basel I, Basel II, credit approaches, mitigation, operational risk and Solvency II.
- • RWA
- • Three pillars
- • Standardized and IRB
Module 22: Solvency, Liquidity, and Other Regulation After the Global Financial Crisis
Basel 2.5, Basel III capital, leverage, liquidity and resolution.
- • Stressed VaR and IRC
- • Capital buffers
- • Living wills
Module 23: High-Level Summary of Basel III Reforms
Credit-risk revisions, model constraints, CVA, operational risk, leverage and output floor.
- • Input floors
- • Output floor
- • Revised frameworks
Module 24: Basel III: Finalising Post-Crisis Reforms
Business Indicator, BIC, ILM, loss-data standards, exclusions and disclosure.
- • Standardized approach
- • Gross and net loss
- • Merger and divestment data
Interactive preview
Free GARP FRM Part II — Operational Risk and Resilience (Book 3) Practice Questions & Exam Preview
Try 15 GARP FRM Part II — Operational Risk and Resilience (Book 3) practice questions from Operational Risk, Resilience and Capital
Practice GARP FRM Part II — Operational Risk and Resilience (Book 3) exam questions with answers and explanations. The full course includes 5 mock exams and chapter study tools.
Exam Preview
Operational Risk, Resilience and Capital
Which statement correctly explains Operational risk?
1 / 15
Flashcards
Card 1 of 10Chapter 1
Question
How should you explain Non-financial risk management in FRM Part II operational-risk practice?
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Focus Learn
- Operational risk
- Non-financial risk management
- Enterprise risk management
- Operational risk categories
- ORM cycle
- Heterogeneous risk
- Heavy-tailed loss
- Interconnected risk
- Operational resilience
- Impact tolerance
Chapter 1: Introduction to Operational Risk and Resilience
Core ideas
Operational risk covers loss from failed processes, people, systems and external events, including legal risk. The Basel definition excludes strategic and reputational risk, although banks should consider them in operational-risk management where appropriate. The chapter places ORM inside NFRM and ERM, distinguishes compliance, strategic and reputational boundaries, and explains why operational losses are heterogeneous, diffuse, interconnected, dynamic and heavy tailed. Resilience shifts the objective from preventing every event to continuing important services through disruption.
Exam method
Classify the cause, event and impact before choosing the risk type. Map the event to the operational-risk cycle, then identify the important service, dependencies and impact tolera…
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Key Benefits
Five Timed Book-Level Mock Exams
Test the 24-chapter book through five 20-question practice papers at the official Part II pace.
- ✓ 100 practice questions across 5 topical practice sets
- ✓ Mock 5 samples five questions from each earlier paper.
- ✓ Every answer includes a source-grounded explanation.
Operational Risk AI Tutor
Clarify governance, controls, resilience, third-party risk, models, capital and regulatory relationships.
- ✓ Compare identification, assessment and control methods.
- ✓ Review cyber, financial-crime and outsourcing cases.
- ✓ Work through stress testing, economic capital and Basel reforms.
Active-Recall Revision
Strengthen memory with 260 flashcards and a 272-item searchable reference sheet.
- ✓ Ten focused chapter cards for every reading.
- ✓ Twenty dedicated number-recall cards.
- ✓ Specific exam traps and close distinctions.
Detailed Chapter Summaries
Connect each framework with its owner, process, evidence, decision and residual risk.
- ✓ Governance, identification, controls and resilience.
- ✓ Cyber, third-party, compliance and model risk.
- ✓ Stress testing, capital and Basel regulation.
Preview & See What You Will Get
Frequently Asked Questions
No. This course covers the Operational Risk and Resilience printed book. Candidates also need the other Part II books and the required Current Issues readings.
GARP describes Part II as 80 equally weighted multiple-choice questions completed in four hours across all Part II domains.
No. They are book-level topical practice. Full Part II practice should combine every domain and Current Issues in the official 80-question format.
The course preserves the official Part II pace of three minutes per question: 20 topical questions in 60 minutes.
No. GARP does not publish a fixed percentage pass mark. The platform uses 70% only as an internal mastery target.
No. Exams Academy is an independent education provider and is not affiliated with or endorsed by GARP.
You receive lifetime access to this course content with no recurring subscription fee.
Yes! Test your knowledge and review detailed explanations with the free GARP FRM Part II — Operational Risk and Resilience (Book 3) Mock Exam Preview below. It contains 15 exam-style questions covering Operational Risk, Resilience and Capital; the full course provides complete mock exams and syllabus coverage.
Exam Format & Details
| Assessment | Book-level topical practice: 20 multiple-choice questions in 60 minutes. The official FRM Part II exam covers all Part II domains with 80 equally weighted questions in four hours. |
| Duration | 60 Minutes |
Focused preparation for FRM Part II Book 3
Operational Risk and Resilience moves from operational-risk foundations, governance, identification, assessment, controls and reporting into cyber resilience, financial crime, outsourcing, third-party risk, compliance, model risk, stress testing, economic capital and post-crisis Basel reforms.
This course keeps all 24 chapters together as one book-level learning hub. Detailed summaries show the governance and analytical method, 260 flashcards build active recall, the 272-item reference sheet supports fast review, and the AI tutor is grounded in the supplied Operational Risk and Resilience source.
Practise the book before combining all Part II domains
The five course mocks each contain 20 questions and run for 60 minutes, preserving the official Part II pace of three minutes per question. The five topical practice sets include 100 practice questions. The 70% platform result is a book-level mastery target, not an official GARP pass mark.
The official FRM Part II exam contains 80 equally weighted multiple-choice questions across all Part II domains and lasts four hours. Complete the other printed books and the required Current Issues readings before full Part II practice.
Who Is This For?
✓ Candidates preparing for the GARP FRM Part II examination
✓ Operational-risk, resilience, cyber, model-risk and regulatory-capital analysts
✓ Candidates who want to complete and track each official Part II book separately
✓ Professionals strengthening governance, control, stress-testing and Basel skills
Preparation centre
GARP FRM Part II — Operational Risk and Resilience (Book 3) Exam Guides
Use these connected guides for the syllabus, exam format, booking and revision strategy.
Ready to Pass Your Exam?
Master this FRM curriculum book with source-grounded summaries, active recall and clearly scoped book-level practice before combining it with the rest of the curriculum.
GARP FRM Part II — Operational Risk and Resilience (Book 3)
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