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PRMIA 8004 Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Topic 1: Best Practices in Risk Management | - Enterprise risk management frameworks - Operational and financial risk controls |
| Topic 2: Ethics and Professional Standards | - Industry codes of ethics and decision-making standards - Professional conduct and ethical responsibilities |
| Topic 3: Case Study Application | - Integrated risk assessment scenarios - Governance and ethics decision analysis |
| Topic 4: Governance, Standards and Regulatory Frameworks | - Regulatory expectations and compliance structures - Risk governance principles in financial institutions |
PRMIA PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Sample Questions:
1. According to the Group of 30 Report, important risks associated with dynamic hedging are:
A) Neither A nor B
B) Greater volatility than expected over the life of an option
C) Sudden gaps in market prices
D) Both A and B
2. 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) Overstates exposure in most cases
D) Can easily reflect the impact of netting
3. When supervising others, a PRMIA member must comply with
A) local regulatory authority standards which may be less onerous than PRMIA standards
B) the standards of the organization where the work is being performed
C) PRMIA Standards
D) his / her established personal standards of work approved in previous work situations
4. Which of the following was not received by Northern Rock as official support from the UK banking and government authorities?
A) A covert money market support operation designed to cover up the difficulties Northern Rock was facing
B) The UK government offered to guarantee all existing and new retail deposits, and to most other creditors
C) The Bank of England provided an additional unlimited facility secured on the collateral of all Northern Rock assets
D) The Bank of England's role as Lender-Of-Last-resort was activated at a penalty interest rate of 150 basis points above the Bank Rate
5. The steps which the US Treasury Department and the Federal Reserve took in July 2008 to boost confidence in both Fannie Mae and Freddie Mac did not include which one of the following:
A) Access to the Federal Reserve discount window
B) Restricting the sale of new Fannie Mae and Freddie Mac securities only to US citizens
C) Reiterating their belief that both companies played a central role in the US housing finance system
D) Removing the prohibition on the Treasury Department to buy both companies stock
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: C | Question # 3 Answer: C | Question # 4 Answer: A | Question # 5 Answer: C |
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