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PRMIA 8008 Exam Syllabus Topics:

SectionObjectives
Risk Management Frameworks- Enterprise risk management principles
  • 1. Risk governance structure
    • 2. Risk appetite and tolerance
      • 3. Risk identification and assessment processes
        - Risk measurement and reporting frameworks
        Counterparty Risk- Derivatives credit risk considerations
        - Counterparty credit exposure
        - Netting and collateral management
        Market Risk- Market risk measurement techniques
        • 1. Value at Risk (VaR)
          • 2. Stress testing and scenario analysis
            - Interest rate, equity, FX, and commodity risk
            Operational Risk- Operational risk types and sources
            - Operational risk management techniques
            • 1. Risk and control self-assessment (RCSA)
              • 2. Key risk indicators (KRI)
                • 3. Loss event data collection
                  Funds Transfer Pricing (FTP)- Internal pricing of funds and liquidity allocation
                  - FTP methodologies
                  Asset-Liability Management (ALM)- Liquidity risk management
                  - Interest rate risk in the banking book (IRRBB)
                  Credit Risk- Credit portfolio risk
                  - Credit risk measurement and modeling
                  • 1. Exposure at default (EAD)
                    • 2. Probability of default (PD)
                      • 3. Loss given default (LGD)

                        PRMIA PRM Certification - Exam III: Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP - 2015 Edition Sample Questions:

                        Question #1

                        Which of the following is closest to the description of a 'risk functional'?

                        • A. Risk functional refers to the Kolmogorov-Smirnov distance
                        • B. A risk functional assigns a penalty value for the difference between a model distribution and a risk's severity distribution
                        • C. A risk functional is a model distribution that is an approximation of the true loss distribution of a risk
                        • D. A risk functional is the distribution that models the severity of a risk
                        Reveal Solution  Discussion  0

                        Correct Answer: B  🗳️

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                        Question #2

                        What would be the correct order of steps to addressing data quality problems in an organization?

                        • A. Assess the current state, design the future state, determine gaps and the actions required to be implemented to eliminate the gaps
                        • B. Design the future state, perform a gap analysis, analyze the current state and implement the future state
                        • C. Call in external consultants
                        • D. Articulate goals, do a 'strategy-fit' analysis and plan for action
                        Reveal Solution  Discussion  0

                        Correct Answer: A  🗳️

                        Explanation: Only visible for Exam4Docs members. You can sign-up / login (it's free).

                        Question #3

                        If A and B be two debt securities, which of the following is true?

                        • A. The probability of simultaneous default of A and B is greatest when their default correlation is 0
                        • B. The probability of simultaneous default of A and B is greatest when their default correlation is negative
                        • C. The probability of simultaneous default of A and B is not dependent upon their default correlations, but on their marginal probabilities of default
                        • D. The probability of simultaneous default of A and B is greatest when their default correlation is +1
                        Reveal Solution  Discussion  0

                        Correct Answer: D  🗳️

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                        Question #4

                        Assuming all other factors remain the same, an increase in the volatility of the returns on the assets of a firm causes which of the following outcomes?

                        • A. An increase in the value of the callable debt of the firm
                        • B. A decrease in the value of the implicit put in in the debt of the firm
                        • C. A decrease in the value of the non-callable debt issued by the firm
                        • D. An increase in the value of the equity of the firm
                        Reveal Solution  Discussion  0

                        Correct Answer: C  🗳️

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                        Question #5

                        Which of the following are considered asset based credit enhancements?
                        I. Collateral
                        II. Credit default swaps
                        III. Close out netting arrangements
                        IV. Cash reserves

                        • A. I and III
                        • B. I and IV
                        • C. II and IV
                        • D. I, II and IV
                        Reveal Solution  Discussion  0

                        Correct Answer: A  🗳️

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