PRMIA 8010 Operational Risk Manager (ORM) Exam Online Training
PRMIA 8010 Online Training
The questions for 8010 were last updated at Dec 24,2024.
- Exam Code: 8010
- Exam Name: Operational Risk Manager (ORM) Exam
- Certification Provider: PRMIA
- Latest update: Dec 24,2024
Identify the correct sequence of events as it unfolded in the credit crisis beginning 2007:
I. Mortgage defaults increased
II. Collapse in prices of unrelated assets as banks tried to create liquidity
III. Banks refused to lend or transact with each other
IV. Asset prices for CDOs collapsed
- A . III, IV, I and II
- B . I, III, IV and II
- C . I, IV, III and II
- D . IV, I, II and III
Which of the following belong in a credit risk report?
- A . Exposures by country
- B . Exposures by industry
- C . Largest exposures by counterparty
- D . All of the above
Which of the following statements are true:
I. A transition matrix is the probability of a security migrating from one rating class to another during its lifetime.
II. Marginal default probabilities refer to probabilities of default in a particular period, given survival atthe beginning of that period.
III. Marginal default probabilities will always be greater than the corresponding cumulative default probability.
IV. Loss given default is generally greater when recovery rates are low.
- A . I and III
- B . I, III and IV
- C . II and IV
- D . I and IV
The VaR of a portfolio at the 99% confidence level is $250,000 when mean return is assumed to be zero. If the assumption of zero returns is changed to an assumption of returns of $10,000, what is the revised VaR?
- A . 260000
- B . 240000
- C . 273260
- D . 226740
Which of the following need to be assumed to convert a transition probability matrix for a given time period to the transition probability matrix for another length of time:
I. Time invariance
II. Markov property
III. Normal distribution
IV. Zero skewness
- A . I, II and IV
- B . III and IV
- C . I and II
- D . II and III
Which of the following contributed to the systemic failure during the credit crisis that began in 2007?
- A . Stress tests that did not stress enough
- B . Moral hazard from the strategy of ‘originate and distribute’
- C . Inadequate attentionpaid to liquidity risk
- D . All of the above
If the full notional value of a debt portfolio is $100m, its expected value in a year is $85m, and the worst value of the portfolio in one year’s time at 99% confidence level is $60m, then what is the credit VaR?
- A . $40m
- B . $25m
- C . $60m
- D . $15m
According to the Basel II framework, subordinated term debt that was originally issued 4 years ago with amaturity of 6 years is considered a part of:
- A . Tier 2 capital
- B . Tier 1 capital
- C . Tier 3 capital
- D . None of the above
According to the implied capital model, operational risk capital is estimated as:
- A . Operational risk capital held by similar firms, appropriately scaled
- B . Total capital less market risk capital less credit risk capital
- C . Capitalimplied from known risk premiums and the firm’s earnings
- D . Total capital based on the capital asset pricing model
Which of the following are a CRO’s responsibilities:
I. Statutory financial reporting
II. Reporting to the audit committee
III. Compliance with risk regulatory standards
IV. Operational risk
- A . I and II
- B . II and IV
- C . III and IV
- D . All of the above
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