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8008 Practice Questions
PRM Certification - Exam III: Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP - 2015 Edition
Last Update 2 days ago
Total Questions : 362
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Our free PRM Certification practice questions crafted to reflect the domains and difficulty of the actual exam. The detailed rationales explain the 'why' behind each answer, reinforcing key concepts about 8008. Use this test to pinpoint which areas you need to focus your study on.
If P be the transition matrix for 1 year, how can we find the transition matrix for 4 months?
Which of the following is the most accurate description of EPE (Expected Positive Exposure):
When compared to a low severity high frequency risk, the operational risk capital requirement for a medium severity medium frequency risk is likely to be:
Which of the following statements are true in relation to Principal Component Analysis (PCA) as applied to a system of term structures?
I. The factor weights on the first principal component will show whether there is common trend in the system
II. The factors to be applied to principal components are obtained from eigenvectors of the correlation matrix
III. PCA is a standard method for reducing dimensionality in data when considering a large number of correlated variables
IV. The smallest absolute eigenvalues and their associated eigenvectors are the most useful for explaining most of the variation
A bank expects the error rate in transaction data entry for a particular business process to be 0.005%. What is the range of expected errors in a day within +/- 2 standard deviations if there are 2,000,000 such transactions each day?
Which of the following statements is the most appropriate description of feedback effects:
If a borrower has a default probability of 12% over one year, what is the probability of default over a month?
For a corporate bond, which of the following statements is true:
I. The credit spread is equal to the default rate times the recovery rate
II. The spread widens when the ratings of the corporate experience an upgrade
III. Both recovery rates and probabilities of default are related to the business cycle and move in opposite directions to each other
IV. Corporate bond spreads are affected by both the risk of default and the liquidity of the particular issue
Which of the following are considered counterparty based credit enhancements?
I. Collateral
II. Credit default swaps
III. Close out netting arrangements
IV. Guarantees
Who has the ultimate responsibility for the overall stress testing programme of an institution?
