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8010 Exam Dumps - PRMIA PRM Certification Questions and Answers

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Questions 4

Which of the following contributed to the systemic failure during the credit crisis that began in 2007?

Options:

A.

Stress tests that did not stress enough

B.

Moral hazard from the strategy of 'originate and distribute'

C.

Inadequate attentionpaid to liquidity risk

D.

All of the above

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Questions 5

As opposed to traditional accounting based measures, risk adjusted performance measures use which of the following approaches to measure performance:

Options:

A.

adjust both return and the capital employed to account for the risk undertaken

B.

adjust capital employed to reflect the risk undertaken

C.

adjust returns based on the level of risk undertaken to earn that return

D.

Any or all of the above

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Questions 6

An investor enters into a 5-year total return swap with Bank A, with the investor paying a fixed rate of 6% annually on a notional value of $100m to the bank and receiving thereturns of the S&P500 index with an identical notional value. The swap is reset monthly, ie the payments are exchanged monthly. On Jan 1 of the fourth year, after settling the last month's payments, the bank enters bankruptcy. What is the legal claim thatthe hedge fund has against the bank in the bankruptcy court?

Options:

A.

$100m

B.

$6m

C.

The replacement value of the swap

D.

$0, as all payments on the swap are current

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Questions 7

Loss provisioning is intended to cover:

Options:

A.

Unexpected losses

B.

Losses in excessof unexpected losses

C.

Both expected and unexpected losses

D.

Expected losses

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Exam Code: 8010
Exam Name: Operational Risk Manager (ORM) Exam
Last Update: Nov 21, 2024
Questions: 240
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