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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, 04:25 AM

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Erick
25 days 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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Carin
8 days ago
Definitely, having both quantitative and qualitative aspects is key for a well-rounded KRI.
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Lynda
13 days ago
A) Quantitative and Qualitative. Consistent. Efficient & Repeatable.
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Georgeanna
1 months ago
Hmm, that makes sense too. I see your point.
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Elenora
1 months ago
I disagree, I believe the answer is C. KRI should be quantitative, consistent, and comparable.
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Jaime
1 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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Kiera
1 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
1 months ago
I think the answer is A, because KRI should be both quantitative and qualitative.
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Soledad
1 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
1 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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Raina
7 days ago
C) Quantitative, consistent, and comparable measures definitely help in evaluating the KRI's performance.
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Louis
13 days ago
B) I think consistency is key too, so that the KRI can be effectively monitored over time.
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Dominque
22 days ago
A) I agree, having both quantitative and qualitative measures is crucial for a well-rounded KRI.
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