PRMIA PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics - 8004 FREE EXAM DUMPS QUESTIONS & ANSWERS

A. transfers the total risk at less cost than traditional reinsurance B. transfers only a limited amount of risk at the usual reinsurance price C. transfers only a limited amount of risk at less cost than traditional reinsurance D. transfers the total risk at the usual reinsurance price

A. Inflation B. Interest Rate C. Currency Settlement D. Basis Risk

A. Use a single master trading agreement as widely as possible with each counter party. B. Use one trading agreement for foreign exchange forwards and another for foreign exchange options. C. Use separate trading agreements for interest rate derivatives, equity derivatives and foreign exchange transactions. D. Use a common trading agreement for interest rate and equity derivatives but a separate agreement for foreign exchange transactions.

A. Many of the banks in the rescue consortium were among LTCM's counterparties B. Some of the banks in the rescue consortium were LTCM investors C. Untimely unwinding of some LTCM positions would lead to large market fluctuations and possible turmoil D. The consortium wanted to keep this out of the regulators' eyes

A. Create credit risk only for the buyer (due to default by the seller) provided the premium is due, and paid, at contract initiation B. Create no credit risk, since the buyer need not exercise the option C. Usually create credit risk only for the seller (to default by the buyer) D. Always generate credit risk to both counterparties

A. All of the above B. Front and back offices need to be independent C. Incentive plans have risk management implications D. Large profits can be an indicator of risk