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PRMIA Exam 8020 Topic 8 Question 9 Discussion

Actual exam question for PRMIA's 8020 exam
Question #: 9
Topic #: 8
[All 8020 Questions]

In order for a KRI to be effective it must be:

Show Suggested Answer Hide Answer
Suggested Answer: A

Definition of an Effective Key Risk Indicator (KRI)

A KRI is a metric used to identify, measure, and monitor emerging risks.

To be effective, KRIs must be both quantitative and qualitative, allowing for a comprehensive risk view.

Key Characteristics of Effective KRIs

Quantitative -- Uses numerical data for trend analysis.

Qualitative -- Incorporates expert judgment and scenario-based insights.

Consistent -- Maintains uniform definitions across reporting periods.

Efficient & Repeatable -- Must be easily measured and consistently reported.

Why Other Answers Are Incorrect

Option

Explanation

B . Qualitative, Consistent, Efficient & Repeatable.

Incorrect -- Excludes quantitative aspects, which are essential for KRIs.

C . Quantitative, Consistent, Comparable, Efficient & Repeatable.

Incorrect -- While comparison is useful, qualitative factors are missing, making this answer incomplete.

D . Quantitative, Repeatable and Efficient.

Incorrect -- Lacks qualitative insights and consistency as key factors for KRIs.

PRMIA Reference for Verification

PRMIA Risk Indicator Guidelines

Basel Committee's Principles on Risk Data and KRI


by Danilo at Apr 06, 2025, 05:25 AM

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Stevie
2 days ago
I think I saw a practice question that emphasized the importance of consistency and repeatability, but I can't recall if it mentioned comparability.
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Francesco
8 days ago
I remember we discussed that KRIs need to be both quantitative and qualitative, but I'm not sure if that's the only requirement.
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Fletcher
13 days ago
I'm a little confused by the wording of these options. I'll need to re-read them carefully to make sure I understand all the criteria and select the best answer.
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Lisha
19 days ago
I got this! The KRI has to be quantitative and qualitative, consistent, and efficient & repeatable. That's exactly what option A says, so I'm confident that's the right answer.
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Edwin
24 days ago
Okay, let's see. I know the KRI needs to be quantitative and qualitative, so that rules out option D. It also has to be consistent, which is mentioned in options A and C. I think A is the best answer since it covers all the points.
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Paul
30 days ago
Hmm, I'm a bit unsure about this one. I need to carefully read through the options and think about which one best captures all the required criteria.
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Tori
1 month ago
This question seems straightforward. I'll focus on the key criteria - the KRI must be quantitative and qualitative, consistent, and efficient & repeatable.
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Erick
6 months ago
You know, a good KRI should be like a Swiss Army knife - versatile and ready for anything. A) covers all the bases, no doubt about it.
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Gilma
5 months ago
I agree, consistency and repeatability are crucial for effective risk monitoring.
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Carin
6 months ago
Definitely, having both quantitative and qualitative aspects is key for a well-rounded KRI.
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Lynda
6 months ago
A) Quantitative and Qualitative. Consistent. Efficient & Repeatable.
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Georgeanna
6 months ago
Hmm, that makes sense too. I see your point.
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Elenora
6 months ago
I disagree, I believe the answer is C. KRI should be quantitative, consistent, and comparable.
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Jaime
6 months ago
Ha! As long as the KRI is 'Quantitative, Repeatable and Efficient', I'm golden. D) is the way to go, no need for all that extra stuff.
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Cory
5 months ago
Kristian: I see your point, but I still think D) is the way to go for simplicity.
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Kristian
5 months ago
User 2: I think C) is better, it includes quantitative and comparable aspects.
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Vanesa
5 months ago
User 1: I agree, D) is the most important for an effective KRI.
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Kiera
6 months ago
C) seems like a solid choice too. Quantitative, consistent, and comparable data is crucial for evaluating a KRI's performance.
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Georgeanna
6 months ago
I think the answer is A, because KRI should be both quantitative and qualitative.
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Soledad
6 months ago
I agree, A) covers all the key points. Consistent, efficient, and repeatable - that's what you need for a KRI to be truly meaningful.
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Rozella
7 months ago
A) sounds like the most comprehensive answer to me. Gotta have those quantitative and qualitative measures to really get a sense of the KRI's effectiveness.
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Renea
5 months ago
D) Repeatable and efficient processes ensure that the KRI can be consistently monitored and improved.
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Raina
5 months ago
C) Quantitative, consistent, and comparable measures definitely help in evaluating the KRI's performance.
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Louis
6 months ago
B) I think consistency is key too, so that the KRI can be effectively monitored over time.
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Dominque
6 months ago
A) I agree, having both quantitative and qualitative measures is crucial for a well-rounded KRI.
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