Provide PRMIA 8004 Dumps Updated Jan 26, 2024 With 112 QA's
Latest 8004 Dumps for Success in Actual PRMIA Certified
NEW QUESTION # 37
Which of the following best characterize the problems that developed at Bankers Trust?
- A. Over exposure to the property market
- B. A failure to try to protect their clients' interests
- C. Volume growth at the expense of margin
- D. Excessive reliance on volatile and sophisticated derivatives
Answer: B
NEW QUESTION # 38
Which of the following was not cited within the chain of miscalculations and deferred decisions for the downfall of Fannie Mae and Freddie Mac
- A. Under-management and under-measurement of market and liquidity risk
- B. They did not raise enough capital to weather the storm as the housing slump expanded
- C. Extreme exposure to foreign currency exposures and losses from non-US$ mortgages
- D. Lawmakers postponed strenghtening regulatory oversight due to partisan infighting
Answer: C
NEW QUESTION # 39
The Basic Knowledge a PPRMIA member should comply with, as stipulated within the PRMIA Standards of Best Practice, Conduct & Ethics, is to
- A. only possess the required skills and/or certification to complete the risk assessment / management work at hand
- B. only improve their PERSONAL professional competence
- C. maintains and improve their professional competence and strive to maintain and improve the competence of other risk professionals
- D. learn from a qualified risk management practitioner
Answer: C
NEW QUESTION # 40
What is (are) the lesson(s) of the Barings' failure?
- A. Front and back offices need to be independent
- B. Incentive plans have risk management implications
- C. Large profits can be an indicator of risk
- D. All of the above
Answer: D
NEW QUESTION # 41
Which of the following was not cited within the chain of miscalculations and deferred decisions for the downfall of Fannie Mae and Freddie Mac
- A. Under-management and under-measurement of market and liquidity risk
- B. They did not raise enough capital to weather the storm as the housing slump expanded
- C. Extreme exposure to foreign currency exposures and losses from non-US$ mortgages
- D. Lawmakers postponed strenghtening regulatory oversight due to partisan infighting
Answer: C
NEW QUESTION # 42
The problems in the Orange County case can best be characterized as failures related to:
- A. Market Risk
- B. Operational and Regulatory Compliance Risk
- C. Credit Risk
- D. All of the Above
Answer: A
NEW QUESTION # 43
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. I, II, and IV only
- C. I, II, III and IV above
- D. III only
Answer: B
NEW QUESTION # 44
What was the main risk scenario on the Metallgesellschaft trading strategy?
- A. Realized losses on short-term contracts against unrealized gains on the long-run contract
- B. The initial price of the underlying being higher than the final price
- C. The short-term price of the underlying being higher than the long-run contract
- D. The final price of the underlying being higher than the initial price
Answer: A
NEW QUESTION # 45
What was the main risk scenario on the Metallgesellschaft trading strategy?
- A. Realized losses on short-term contracts against unrealized gains on the long-run contract
- B. The initial price of the underlying being higher than the final price
- C. The short-term price of the underlying being higher than the long-run contract
- D. The final price of the underlying being higher than the initial price
Answer: A
NEW QUESTION # 46
Employees shall be remunerated adequately for the roles that they perform, where 'adequately' is defined
- A. using external references and benchmarks, and in a framework which is consistent with the type of risk-taking behavior expected of employees
- B. as being the market norm for similarly situated personnel in competitive organizations
- C. using the risk reward profile for each business line in the organization
- D. as commensurate with policies to attract and retain high income / revenue earners
Answer: A
NEW QUESTION # 47
Select the one correct statement relative to Barings Bank.
- A. Proprietary and agency trading were separate and therefore did not increase risk.
- B. Proprietary and agency trading were combined and therefore did not increase risk.
- C. Proprietary and agency trading were combined and therefore did increase risk.
- D. Proprietary and agency trading were separate and did increase risk.
Answer: C
NEW QUESTION # 48
According to the Northern Rock Case Study, what is Forced Insolvency?
- A. The bank is legally solvent but if, because it cannot fund its operations, it is forced to liquidate assets it could do so only at less than nominal values (fire sale) and this would make it legally insolvent (value of assets falls below those of liabilities)
- B. The bank is solvent in that the current value of its assets (measured at book value) is more than the value of its liabilities; so even if the bank were to liquidate all of its assets it would be able to repay all depositors and other creditors
- C. The bank is insolvent in that the current value of its assets (measured at book value) is less than the value of its liabilities; thus even if the bank were to liquidate all of its assets it would not be able to repay all depositors and other creditors
- D. The bank is legally solvent but its current funding costs (which are likely to continue) exceed the average rate of return on its assets and hence it would soon become insolvent as it would be making losses and would eventually exhaust its equity capital
Answer: A
NEW QUESTION # 49
The Chair of the PRMIA Board of Directors may hold the following offices:
- A. Vice Chair
- B. Chair only
- C. Parliamentarian
- D. Secretary
Answer: B
NEW QUESTION # 50
Zheng Zhu wants to open a new PRMIA Chapter in Wuhan, China. He can do this if:
- A. At least 100 members live within 50 miles
- B. All of the above
- C. Approved by the Board of Directors
- D. A local business sponsors the chapter
Answer: C
NEW QUESTION # 51
TMFI's internal procedures and management were
- A. fully aware of the uninsured risks Fortress Re were taking
- B. None of the above
- C. aware that they had some uninsured liabilities but thought they had enough capital to withstand any uninsured losses
- D. absolutely unaware of their uninsured liabilities
Answer: D
NEW QUESTION # 52
The Risk Management Infrastructure of an organization must:
I To the extent possible, avoid silos of control and oversight
II Have budgets set by the business unit leaders
III Actively provide ongoing professional development for risk management staff and require them to be committed to standards of best practice, conduct and ethics in their work IV Provide general risk management and related corporate governance training for employees of the organization as a Whole
- A. I and III only
- B. I only
- C. All of these are expected of the Risk Management Infrastructure
- D. I, III and IV only
Answer: D
NEW QUESTION # 53
Which of the following was the key contributory risk factor to the problems at LTCM in the summer of 1998?
I Model Risk
II Lack of Transparency
III Breakdown of Historical Correlations
IV Over Regulation by Federal Regulators
- A. I and III only
- B. All of these were key elements of the problems at LTCM
- C. III and IV only
- D. III only
Answer: D
NEW QUESTION # 54
A risk assessment report generated by a PRMIA member creates an apparent conflict of interest between the PRMIA standards and those of the client organization.
Of the following, which is the correct hierarchy to follow to resolve the conflict?
I The decision of a superior within the organization
II PRMIA Standards
III Guidelines from the regulators in which the organization operates
IV The laws of the country
- A. II, I, IV, and III
- B. I, II, III, and IV
- C. III, II, IV, and I
- D. IV, III, II, and I
Answer: D
NEW QUESTION # 55
As LTCM started to have major losses, it compounded its problems by doing what?
- A. Returning capital to the general partners before others
- B. Trying to borrow more money from major money centre banks
- C. Unwinding its' more liquid trades thereby creating more liquidity risk overall
- D. Issuing Subordinated Debt
Answer: C
NEW QUESTION # 56
Which of the following was NOT a factor in the WorldCom collapse?
- A. Failed corporate governance
- B. Unfair pricing to customers
- C. Accounting abuses
- D. Over stating actual sales
Answer: B
NEW QUESTION # 57
Which of the following would have contributed to noticing and preventing Leeson's violations at Barings?
- A. More senior level involvement at Barings regarding use of derivatives
- B. Recognition that large profits can be an indicator of higher risk
- C. All of the above
- D. Separation of front and back offices
Answer: C
NEW QUESTION # 58
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