PRMIA Exam IV: Case Studies: Standards: Governance, Best Practices and Ethics - 2015 Edition - 8009 FREE EXAM DUMPS QUESTIONS & ANSWERS]

Question 1

Which of the following are PRMIA Governance Principles?
I. Sufficiency of Key Resources and Process
II. State of the Art Risk Management Technology
III. Ongoing Education and Discernment
IV. Sufficiency of Key Competencies

A. All of these are PRMIA Governance Principles B. I, II and IV only C. I and II only D. I, III and IV only

Discussion 0

Correct Answer: D Vote an answer

Question 2

As a result of the US government's intervention, which of the following is true?

A. The cost of borrowing for Fannie Mae and Freddie Mac should decline because the government will be standing behind their debts and the buying and selling of mortgage debt will continue B. The cost of borrowing for house buyers will rise because of the risk premium now built into the cost of such a government guarantee C. The systemic risks still remain in the housing market because it increases the US government's debt D. Foreign Central Banks will continue to sell their holdings of Fannie Mae and Freddie Mac securities

Discussion 0

Correct Answer: A Vote an answer

Question 3

According to the PwC report China Aviation Oil, in order to avoid recording and reporting losses, the company adopted which approach covering up its losses?

A. selling short-term options with extremely low-risk profiles to generate premiums to cover the cost of closing out loss-making option positions B. selling long-term options with extremely high-risk profiles to generate premiums to cover the cost of closing out loss-making option positions C. selling long-term options with extremely low-risk profiles to generate premiums to cover the cost of closing out loss-making option positions D. selling short-term options with extremely high-risk profiles to generate premiums to cover the cost of closing out loss-making option positions

Discussion 0

Correct Answer: B Vote an answer

Question 4

Mary Jones wants the Bylaws of PRMIA to be changed so that people can't join PRMIA unless they meet a set of criteria she has devised with her colleagues. She can do this by getting which of the following approvals:

A. The Board of Directors alone B. The Board of Directors, but only if the Blue Ribbon Panel affirms the change C. 34 of all Members D. The Board of Directors and a majority of the Members

Discussion 0

Correct Answer: D Vote an answer

Question 5

Corporate Governance ...

A. Is defined as business decision making predicated on a belief in potential rewards, balanced with the knowledge, understanding and appreciation of the risk taken to pursue those potential rewards B. Eliminates risk to the greatest extent possible C. Is defined as that which is best practiced within an enterprise risk management framework, guided by the PRMIA Standards of Best Practice, Conduct and Ethics above all else D. Is defined as the assembled knowledge and wisdom of the collective stakeholders in the organization, set to maximize shareholder value

Discussion 0

Correct Answer: A Vote an answer

Question 6

National Australia Bank and Barings cases are similar in that:

A. The back offices had inadequate procedures B. None of the above C. Both A and B D. Losses kept increasing while rogue trader(s) hid their positions

Discussion 0

Correct Answer: C Vote an answer

Question 7

Which of the following is FALSE?

A. Nick Leeson also ran the back office for his trading area B. SIMEX made inquiries to Barings Bank about large margin calls on its positions C. Nick Leeson dealt in complex derivatives lacking transparency of pricing D. Nick Leeson claimed to be running an arbitrage book

Discussion 0

Correct Answer: C Vote an answer

Question 8

The Chief Risk Officer is responsible for the management of the Risk Management Infrastructure, and as such helps the Board define, and then implements throughout the organization, the risk appetite of the organization.
Which of the following is also the responsibility of the Chief Risk Officer?

A. Ensures that reporting of risk and governance-related matters are produced in a timely and accurate manner B. Maintaining appropriate assurance measures to ensure that the Governance and Risk framework of the organization is effective, and, if any shortcomings are discovered, to escalate these to the Board so that remedial action can be taken in an appropriate and timely manner C. Acts as sponsor for risk throughout the organization and ensures that a risk culture is implemented, and maintained D. ensuring that all employees understand the rules and regulations (both internal and external) with which they must comply and the implications, for them and for the organization, of non-compliance

Discussion 0

Correct Answer: A Vote an answer

Question 9

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. Overstates exposure in most cases C. Captures portfolio effects but not tenor differences D. Can easily reflect the impact of netting

Discussion 0

Correct Answer: B Vote an answer