PRMIA 8009 Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Topic 1: Governance and Regulatory Standards | - Regulatory Frameworks
|
| Topic 2: Standards and Professional Practices | - Benchmarking and Industry Guidelines
|
| Topic 3: Risk Management Best Practices | - Operational Risk Management
|
| Topic 4: Ethics and Professional Conduct | - Ethical Principles
|
PRMIA Exam IV: Case Studies: Standards: Governance, Best Practices and Ethics - 2015 Edition Sample Questions:
Question #1
The "normal" credit loss profile of Washington Mutual was increased by which of the following?
A. The general downturn in the economy of the US
B. Catastrophic losses in its own credit card division
C. Acquisitions like Long Beach and Providian
D. By lowering its own credit underwriting standards
Question #2
A risk manager has just completed a risk assessment project. The report has been given to the risk manager's direct supervisor, who refuses to escalate the material issues raised in the report. Further, the direct supervisor edits the report to remove the section describing the material risk, who then submits it to the firm's Executive Committee.
According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), which of the following actions is most appropriate:
A. The risk manager has submitted the report to their direct supervisor and their obligation ends at this point, nothing further should be done
B. Escalation of the issue is against the Code of Conduct because one should respect the administrative structure of the organization
C. The risk manager should attempt to resolve the conflict with the direct supervisor, but if that does not work, they should contact the Whistle-Blowing Hotline of the organization. If no such hot-line is in place, they should contact the PRMIA Ethics Committee
D. If the risk manager deems it appropriate, he / she should send a copy of the original report to the CEO
Question #3
According to the Group of 30 Report, important risks associated with dynamic hedging are:
A. Both A and B
B. Neither A nor B
C. Greater volatility than expected over the life of an option
D. Sudden gaps in market prices
Question #4
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. III, II, IV, and I
B. II, I, IV, and III
C. IV, III, II, and I
D. I, II, III, and IV
Question #5
TMFI's internal procedures and management were
A. aware that they had some uninsured liabilities but thought they had enough capital to withstand any uninsured losses
B. None of the above
C. fully aware of the uninsured risks Fortress Re were taking
D. absolutely unaware of their uninsured liabilities
Solutions:
| Question #1 Correct Answer: C | Question #2 Correct Answer: C | Question #3 Correct Answer: A | Question #4 Correct Answer: C | Question #5 Correct Answer: D |
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