Explanation:
In the three lines of defense model, the second line of defense (typically the risk management and compliance functions) is responsible for designing, implementing, and maintaining the risk management framework. This includes establishing risk management methods, measurement methods, policies, and procedures. The first line makes decisions for managing risks (takes the risk), and the third line (internal audit) reports independently to the board.
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Q.36 Which of the following is most likely a role and responsibility of the second line of defense for the overall risk management of a firm under risk governance?
A
Making decisions for managing risks.
B
Establishing risk management methods, and measurement methods.
C
Overseeing the risk management activities of the third line of defense.
D
Reports independently to the board of directors.
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