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: Mar 28, 2025

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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

Which of the following carry greater counterparty risk: a forward contract on a 10 year note, or a commercial paper carrying a AA credit rating with identicalmaturity and notional?

A : forward contract has greater credit risk as its future gains are unknown

B : edit risk can not be compared in these terms

C : ey both carry the same credit risk

D : commercial paper has greater credit risk as the entire notional is outstanding

Answer: D

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

Which of the following is not a limitation of the univariate Gaussian model to capture the codependence structure between risk factros used for VaR calculations?

A : univariate Gaussian model fails to fit to the empirical distributions of risk factors, notably their fat tails and skewness.

B : termining the covariance matrix becomes an extremely difficult task as the number of risk factors increases.

C : cannot capture linear relationships between risk factors.

D : ingle covariance matrix is insufficient to describe the fine codependence structure among risk factors as non-linear dependencies or tail correlations are not captured.

Answer: C

Question 5

A financial institution is considering shedding a business unit to reduce its economic capital requirements. Which of the following is an appropriate measure of theresulting reduction in capital requirements?

A : cremental capital for the business unit in consideration

B : oportionate capital for the business unit in consideration

C : rcentage of total gross income contributed by the business unit in question

D : rginal capital for the business unit in consideration

Answer: A

Page: 1 / 49

Total 242 Questions | Updated On: Mar 28, 2025

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