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PRMIA Exam IV: Case Studies: Standards: Governance, Best Practices and Ethics - 2015 Edition Sample Questions:
1. How much of Washington Mutual's assets were funded by customer deposits for the decade ending in 2006?
A) 40%
B) 30%
C) 60%
D) 50%
2. According to LTCM managers:
A) Stress Testing was not conducted
B) Stress Testing looked at the 12 biggest deals with each of their top 20 counterparties
C) Stress Testing was not necessary because their trades were hedged
D) Stress Testing was elaborate, complex and conducted on their entire portfolio. It included the assumptions of a major breakdown in historical correlations
3. A PRMIA member is offered a highly paid work assignment on the condition that some aspects of assignment are not to be done according to PRMIA standards.
What should they do?
A) Perform the assignment, noting in the final report the standards to which the assignment was done
B) Accept the assignment, and prior to doing any work, report the conflict of interest to the organization's compliance department
C) Accept the assignment, produce and deliver two reports according to both standards
D) The PRMIA member should place the integrity of the risk management profession and users of risk management above their own personal interests, and refuse the work
4. PRMIA Governance Principles
A) must be adhered to by all PRM charter holders
B) must be adhered to by all financial firms that are PRMIA members
C) is a set of recommendations based on research and best practice
D) must be adhered to by all PRMIA member organizations
5. The problems in the Orange County case can best be characterized as failures related to:
A) Operational and Regulatory Compliance Risk
B) Market Risk
C) All of the Above
D) Credit Risk
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: B | Question # 3 Answer: D | Question # 4 Answer: C | Question # 5 Answer: B |
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