PRIMA 8006 PRM Certification – Exam I: Finance Theory, Financial Instruments, Financial Markets – 2015 Edition Online Training

PRIMA 8006 Online Training

The questions for 8006 were last updated at Apr 28,2025.

Exam Code: 8006
Exam Name: PRM Certification - Exam I: Finance Theory, Financial Instruments, Financial Markets – 2015 Edition
Certification Provider: PRIMA
Latest update: Apr 28,2025

Question #101

Credit risk in the case of a CDO (Collateralized Debt Obligation) is borne by:

A . The sponsoring institution
B . Investors
C . The reference entity
D . The Special Purpose Vehicle (SPV)

Question #102

An investor believes that the market is likely to stay where it is.

Which of the following option strategies will help him profit should his view be proven correct (assume all strategies described below are long only)?

A . Strangle
B . Collar
C . Butterfly spread
D . Straddle

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Question #103

Caps, floors and collars are instruments designed to:

A . Hedge against credit spreads changing
B . Hedge gamma risk in option portfolios
C . Hedge interest rate risks
D . All of the above

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Question #104

Which of the following are true:

I. A interest rate cap is effectively a call option on an underlying interest rate

II. The premium on a cap is determined by the volatility of the underlying rate

III. A collar is more expensive than a cap or a floor

IV. A floor is effectively a put option on an underlying interest rate