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Exam SCR topic 1 question 13 discussion

Actual exam question from GARP's SCR
Question #: 13
Topic #: 1
[All SCR Questions]

A climate analyst at a research institution analyzes climate risk for various companies. The analyst examines transmission channels of climate risk as part of the risk identification process.
Which of the following examples can the analyst use to describe an operational risk transmission channel?

  • A. A damaging hurricane leads to a run on credit as affected communities need cash to fund recovery efforts.
  • B. Following a high carbon tax, a company strands high-emissions assets.
  • C. High commodity prices boost revenues for a mining company that extracts lithium.
  • D. Flooding damages an information technology company data center.
Show Suggested Answer Hide Answer
Suggested Answer: D 🗳️
by Dunjeon_Master at April 17, 2023, 6:31 p.m.

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xdude
1 year, 1 month ago
'A' would lead to liquidity risk. Correct answer is D
upvoted 1 times
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CecileC
1 year, 7 months ago
The question is not clear whether it's about "operation risk channeled from physical risk" or "any other risk channeled through operation risk".
upvoted 1 times
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Dunjeon_Master
1 year, 7 months ago
POORLY FRAMED IT SHOULD BE A
upvoted 1 times
SCR_Fighter
1 year, 7 months ago
I agree the answer should be D, A is related to credit risk instead
upvoted 2 times
sbrudersohn
1 year, 7 months ago
Indeed, this is operational risk channelled through physical risk (pg. 121)
upvoted 1 times
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C (25%)
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