Free PRMIA 8010 Exam Questions

Become PRMIA Certified with updated 8010 exam questions and correct answers

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Total 242 Questions | Updated On: Nov 21, 2024

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Question 1

The key difference between 'top down models' and 'bottom up models' foroperational risk assessment is:

A : p down approaches to operational risk are based upon an analysis of key risk drivers, while bottom up approaches consider causality in risk scenarios.

B : ttom up approaches to operational risk are based upon an analysis of key risk drivers, while top down approaches consider causality in risk scenarios.

C : ttom up approaches to operational risk calculate the implied operational risk using available data such as income volatility, capital etc; while top down approaches use causal factors, risk drivers and other factors to get an aggregated estimate of risk

D : p down approaches to operational risk calculate the implied operational risk using available data such as income volatility, capital etc; while bottom up approaches use causal factors, risk drivers and other factors to get an aggregated estimate of risk.

Answer: D

Question 2

There are two bonds in a portfolio, each with a marketvalue of $50m. The probability of default of the two bonds over a one year horizon are 0.03 and 0.08 respectively. If the default correlation is zero, what is the one year expected loss on this portfolio?

A : $11m

B : $5.26m

C : $5.5m

D : $1.38m

Answer: C

Question 3

Under the KMV Moody's approach to calculating expectingdefault frequencies (EDF), firms' default on obligations is likely when:

A : pected asset values one year hence are below total liabilities

B : et values reach a level below short term debt

C : et values reach a level below totalliabilities

D : et values reach a level between short term debt and total liabilities

Answer: D

Question 4

A risk management function is best organized as:

A : tegrated with the risk taking functions as risk management should be a pervasive activity carried out at all levels of theorganization.

B : port independently of the risk taking functions

C : porting directly to the traders, as to be closest to the point at which risks are being taken

D : part of the trading desks and other risk taking teams

Answer: B

Question 5

In respect of operational risk capital calculations, the Basel II accord recommends a confidence leveland time horizon of

A : 99.9% confidence level over a 10 day time horizon

B : 99% confidence level over a 10 year time horizon

C : 99% confidence level over a 1 year time horizon

D : 99.9% confidence level over a 1 year time horizon

Answer: D

Page: 1 / 49

Total 242 Questions | Updated On: Nov 21, 2024

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