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PwC concluded that the accounting policy adopted by China Aviation Oil was incorrect because itA . only regarded the intrinsic value (i.e. the difference between the strike price and the forward price of the underlying commodity) as the fair value of its optionsB . took into account both the intrinsic...

Which of the following regarding Orange County is FALSE?A . Bob Citron engaged in risky strategies to benefit personallyB . Bob Citron tried to "ride the yield curve"C . Bob Citron heavily leveraged his positions using reposD . Citron's losses were eventually exposed by massive margin callsView AnswerAnswer: A

Boards of Directors, including Audit and Risk Committees must review thoroughly compensation plans of potentially "highly compensated positions" for: I. competitive market conditions II. ensuring compliance with their corporate risk appetite and fiduciary responsibility to shareholders III. ensuring any discretionary bonus plans are geared towards keeping high income / revenue...

Several clients, including Procter and Gamble took legal action against Bankers Trust, claiming Bankers TrustA . sold them derivative products without properly advising them of the relevant risksB . did not honour its contractual obligations to payC . was involved in accounting fraudD . hid profitsView AnswerAnswer: A

The Chair, Vice Chair, Secretary and Treasurer of the PRMIA Board of Directors are elected by:A . All PRMIA Fellow MembersB . The Regional DirectorsC . The Blue Ribbon Advisory PanelD . A two-thirds affirmative vote of all membersView AnswerAnswer: B

PRMIA Governance PrinciplesA . must be adhered to by all PRMIA member organizationsB . is a set of recommendations based on research and best practiceC . must be adhered to by all PRM charter holdersD . must be adhered to by all financial firms that are PRMIA membersView AnswerAnswer: B

Taisei Fire and Marine Insurance CoA . relied almost entirely on Fortress Re's management team for information on the risks in its portfolioB . relied on the information it received from other members of the reinsurance pool to manage its risksC . had a full understanding from Fortress Re of...

The problems at Bankgesellschaft Berlin can best be characterized as failures related to:A . Market RiskB . Credit RiskC . Operational RiskD . Both B and CView AnswerAnswer: D

According to the Group of 30 Report, option contracts:A . Always generate credit risk to both counterpartiesB . Create credit risk only for the buyer (due to default by the seller) provided the premium is due, and paid, at contract initiationC . Create no credit risk, since the buyer need...

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 casesB . Captures portfolio effects but not tenor differencesC . Can easily reflect the impact of nettingD . Overstates...