Best Quality 8009 Exam Questions PRMIA Test To Gain Brilliante Result!
Preparations of 8009 Exam 2021 PRM Unlimited 112 Questions
NEW QUESTION 12
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 generators IV. reporting all such personnel to the local regulator
- A. II, III and IV only
- B. I and II only
- C. All of the above
- D. I, II and IV only
Answer: B
NEW QUESTION 13
When Fannie Mae and Freddie Mac were taken under US government conservatorship, which of the following was not included within their operating mandate?
- A. Fannie Mae and Freddie Mac will continue to buy home loans from banks to repackage them as mortgage-backed securities
- B. The US government will provide capital as needed in return for preferred shares in the companies
- C. The US government will buy mortgage-backed securities in the open market as needed
- D. There was a 2 year limit to the conservatorship
Answer: D
NEW QUESTION 14
The retrocession insurance cover was provided by
- A. Fortress Re and their reinsurers
- B. Fortress Re and other insurers
- C. The fronting insurance companies
- D. The Fortress Re reinsurers only
Answer: D
NEW QUESTION 15
Up until 2006, which of the following was not a primary driver for Washington Mutual's earning?
- A. Lending to consumers and small businesses.
- B. Complex derivative trades based on volatility indices.
- C. The provision of fee based services to its customers.
- D. Deposit taking activities which generated net interest income.
Answer: B
NEW QUESTION 16
The Basic Knowledge a PPRMIA member should comply with, as stipulated within the PRMIA Standards of Best Practice, Conduct & Ethics, is to
- A. only improve their PERSONAL professional competence
- B. learn from a qualified risk management practitioner
- C. maintains and improve their professional competence and strive to maintain and improve the competence of other risk professionals
- D. only possess the required skills and/or certification to complete the risk assessment / management work at hand
Answer: C
NEW QUESTION 17
John Smith wants to run for election to the Board of Directors of PRMIA. To be nominated, he needs:
- A. The backing of 6% of local members
- B. To go through a screening process conducted by the Nominations Committee
- C. The backing of three other members
- D. The backing of five other members and to be serving on at least one PRMIA Committee
Answer: C
NEW QUESTION 18
Select the one correct statement relative to Barings Bank.
- A. Proprietary and agency trading were combined and therefore did not increase risk.
- B. Proprietary and agency trading were separate and therefore did not increase risk.
- C. Proprietary and agency trading were separate and did increase risk.
- D. Proprietary and agency trading were combined and therefore did increase risk.
Answer: D
NEW QUESTION 19
The problems in the Orange County case can best be characterized as failures related to:
- A. All of the Above
- B. Market Risk
- C. Credit Risk
- D. Operational and Regulatory Compliance Risk
Answer: B
NEW QUESTION 20
The Chair, Vice Chair, Secretary and Treasurer of the PRMIA Board of Directors are elected by:
- A. The Blue Ribbon Advisory Panel
- B. A two-thirds affirmative vote of all members
- C. All PRMIA Fellow Members
- D. The Regional Directors
Answer: D
NEW QUESTION 21
Washington Mutual's acquisition of Long Beach Financial changed its business model and increased its credit loss profile because
- A. Long Beach Financial had losses which it hadn't realized at the time of the takeover
- B. the two banks were focussed in different markets
- C. The resulting loss rate for Washington Mutual was more than 3 times higher than other mortgage lenders tracked by the FDIC
- D. Of a general deterioration of credit quality generally
Answer: C
NEW QUESTION 22
When supervising others, a PRMIA member must comply with
- A. the standards of the organization where the work is being performed
- B. his / her established personal standards of work approved in previous work situations
- C. local regulatory authority standards which may be less onerous than PRMIA standards
- D. PRMIA Standards
Answer: D
NEW QUESTION 23
Bankgesellschaft Berlin's failures can be best characterised as
- A. both A and B
- B. credit risk caused by a diversified portfolio of poor-quality loans
- C. none of the above
- D. credit risk caused by overexposure to the property market
Answer: D
NEW QUESTION 24
The Q4 2003 trading strategy of China Aviation Oil was
- A. to buy puts and sell calls
- B. to sell calls and buy puts
- C. to buy calls and sell puts
- D. to sell puts and buy calls
Answer: B
NEW QUESTION 25
Which of the following best characterizes the problems that developed at Bankgesellschaft Berlin?
- A. Banking is a "for-profit" business, not a means of fulfilling political goals.
- B. Excessive reliance on volatile trading income.
- C. Volume growth at the expense of margin.
- D. A company culture where profits may justify "excesses."
Answer: A
NEW QUESTION 26
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. Extreme exposure to foreign currency exposures and losses from non-US$ mortgages
- B. They did not raise enough capital to weather the storm as the housing slump expanded
- C. Lawmakers postponed strenghtening regulatory oversight due to partisan infighting
- D. Under-management and under-measurement of market and liquidity risk
Answer: A
NEW QUESTION 27
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. Captures portfolio effects but not tenor differences
- B. Overstates exposure in most cases
- C. Can easily reflect the impact of netting
- D. Gives an accurate result in most cases
Answer: B
NEW QUESTION 28
Which of the following CANNOT be counted as a reason why LTCM was given a rescue package and not left to default?
- A. Untimely unwinding of some LTCM positions would lead to large market fluctuations and possible turmoil
- B. The consortium wanted to keep this out of the regulators' eyes
- C. Some of the banks in the rescue consortium were LTCM investors
- D. Many of the banks in the rescue consortium were among LTCM's counterparties
Answer: B
NEW QUESTION 29
MGRM's losses due to "stacking" started to increase when
- A. the oil market went from strong contango to weak contango
- B. the oil market went from backwardation to contango
- C. the oil market went from weak backwardation to strong backwardation
- D. the oil market went from contango to backwardation
Answer: B
NEW QUESTION 30
Which of the following was NOT a factor in the Long Term Capital Management case?
- A. Unwinding of liquid positions at the beginning of major losses
- B. Changes/breakdowns in historical correlations
- C. Inadequate separation of front and back offices
- D. Model risk
Answer: C
NEW QUESTION 31
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