PRIMA 8004 2011 PRM Certification – Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Online Training
PRIMA 8004 Online Training
The questions for 8004 were last updated at Dec 24,2024.
- Exam Code: 8004
- Exam Name: 2011 PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics
- Certification Provider: PRIMA
- Latest update: Dec 24,2024
According to the Group of 30 Report, deriving aggregate potential credit exposure for a counterparty by adding up the potential exposure of multiple transactions:
- A . Gives an accurate result in most cases
- B . Captures portfolio effects but not tenor differences
- C . Can easily reflect the impact of netting
- D . Overstates exposure in most cases
When local rules and regulations conflict with the PRMIA Standards of Best Practice, Conduct and Ethics the PRMIA member should …
- A . Seek advice from a qualified party, being mindful of legal and confidentiality requirements
- B . Modify the interpretation of local rules and regulations to meet the situation
- C . Ignore local rules and regulations
- D . Respect local rules and regulations
The Chief Risk Officer is responsible for the management of the Risk Management Infrastructure, and as such helps the Board define, and then implements throughout the organization, the risk appetite of the organization.
Which of the following is also the responsibility of the Chief Risk Officer?
- A . Maintaining appropriate assurance measures to ensure that the Governance and Risk framework of the organization is effective, and, if any shortcomings are discovered, to escalate these to the Board so that remedial action can be taken in an appropriate and timely manner
- B . ensuring that all employees understand the rules and regulations (both internal and external) with which they must comply and the implications, for them and for the organization, of non-compliance
- C . Ensures that reporting of risk and governance-related matters are produced in a timely and accurate manner
- D . Acts as sponsor for risk throughout the organization and ensures that a risk culture is implemented, and maintained
A risk manager is asked to analyze the credit risk of a convertible bond. The risk manager has never analyzed convertible bonds, but does have significant expertise in credit risk. The risk manager accepts the assignment, finds a paper on the subject through the PRMIA web site and copies the method used there. The risk manager completes the assignment and delivers a report to his or her direct supervisor and the supervisor is quite pleased.
According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), this was acceptable behavior if the following conditions were met:
I. The risk manager disclosed the lack of knowledge about convertible bonds
II. The methodology employed is disclosed and explained
III. The report was just to be used for analysis and not in practice
IV. The risk manager was sure of his/her understanding of the paper found on the web
- A . I and II
- B . I, II and IV
- C . I, II and III
- D . I only
Which items below were at the core of the problems at Bankgesellschaft Berlin?
- A . Political corruption and poor management
- B . Over exposure to the property market
- C . Rash guarantees given to investors in property linked funds
- D . All of the above
The problems at WorldCom can best be characterized as related to:
- A . Market Risk
- B . Credit Risk
- C . Operational and Regulatory Compliance Risk
- D . All of the Above
The key people involved in the application of good governance and risk management must:
I. be trustworthy
II. be honest
III. be approved by the local regulator
IV. treat others fairly at all times
- A . I, II, and III only
- B . III only
- C . I, II, and IV only
- D . I, II, III and IV above
As LTCM started to have major losses, it compounded its problems by doing what?
- A . Trying to borrow more money from major money centre banks
- B . Issuing Subordinated Debt
- C . Returning capital to the general partners before others
- D . Unwinding its’ more liquid trades thereby creating more liquidity risk overall
Washington Mutual’s acquisition of Long Beach Financial changed its business model and increased its credit loss profile because
- A . The resulting loss rate for Washington Mutual was more than 3 times higher than other mortgage lenders tracked by the FDIC
- B . the two banks were focussed in different markets
- C . Long Beach Financial had losses which it hadn’t realized at the time of the takeover
- D . Of a general deterioration of credit quality generally
Every PRMIA chapter is designed to serve the local needs of members, so they often have fairly independent planning structures and ideas.
According to the PRMIA Bylaws, Regional Chapters and Regional Directors:
- A . Can have their own offices, bylaws and regulations provided they do not conflict with those of PRMIA
- B . Can have meetings that only local members are allowed to attend
- C . Can sign contracts on behalf of PRMIA without prior approval from the Board of Directors
- D . All of the above
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