PRMIA 8011 Exam Practice Material in Three Diverse Versions

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PRMIA 8011 Certification Exam is ideal for professionals who are involved in credit risk management, counterparty risk management, credit analysis, lending, and other related fields. Credit and Counterparty Manager (CCRM) Certificate Exam certification exam is designed to help individuals develop a deep understanding of the principles, concepts, and practices of credit risk and counterparty risk management. Individuals who pass the certification exam will be able to demonstrate their knowledge and expertise in this field, which can help them advance their careers and improve their job prospects.

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The PRMIA 8011 exam is conducted in a computer-based format, and participants are given four hours to complete it. 8011 exam consists of 100 multiple-choice questions, and the passing score is set at 60%. 8011 Exam is available in English and is administered globally at designated testing centers.

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q288-Q293):

NEW QUESTION # 288
Which of the following are valid approaches to leveraging external loss data for modeling operational risks:
I. Both internal and external losses can be fitted with distributions, and a weighted average approach using these distributions is relied upon for capital calculations.
II. External loss data is used to inform scenario modeling.
III. External loss data is combined with internal loss data points, and distributions fitted to the combined data set.
IV. External loss data is used to replace internal loss data points to create a higher quality data set to fit distributions.

A. II and IV
B. All of the above
C. I and III
D. I, II and III

Answer: D

Explanation:
Internal loss data is generally the highest quality as it is relevant, and is 'real' as it has occurred to the organization. External loss data suffers from a significant limitation that the risk profiles of the banks to which the data relates is generally not known due to anonymization, and may likely may not be applicable to the bank performing the calculations. Therefore, replacing external loss data with external loss data is not a good idea. Statement IV is therefore incorrect.
All other approach described are valid approaches for the risk analyst to consider and implement. Therefore statements I, II and III are correct and IV is not.

NEW QUESTION # 289
For a security with a daily standard deviation of 2%, calculate the 10-day VaR at the 95% confidence level.
Assume expected daily returns to be nil.

A. 0.104
B. 0.02
C. 0.1471
D. None of the above.

Answer: A

Explanation:
If the daily standard deviation is 2%, the 10-day standard deviation will be 2%* #10 = 0.063245. The value of Z at the 95% confidence level is 1.64485. Therefore the VaR value is 1.64485 * 0.063245 = 10.4%. The other choices are incorrect.

NEW QUESTION # 290
Which of the following is not an approach used for stress testing:

A. Historical scenarios
B. Hypothetical scenarios
C. Monte Carlo simulation
D. Algorithmic approaches

Answer: C

Explanation:
Choice 'c' is the correct answer as Monte Carlo simulations are not used to generate stress scenarios. They are applicable to VaR calculations under certain situations, and are not used for stress tests. The other three represent valid approaches to stress testing.

NEW QUESTION # 291
Which of the following statements is true:
I. If the sum of its parameters is less than one, GARCH is a mean reverting model of volatility, while EWMA is never mean reverting II. Standardized returns under both EWMA and GARCH show less non-normality than non standardized returns III. Steady state variance under GARCH is affected only by the persistence coefficient IV. Good risk measures are always sub-additive

A. I, II and III
B. II, III and IV
C. I & II
D. I, II and IV

Answer: D

Explanation:
GARCH is a mean reverting model of volatility, with a steady state mean that the model reverts to in the absence of market shocks. EWMA is not mean reverting and volatility under EWMA stays constant in the absence of shocks. Therefore statement I is correct.
Both EWMA and GARCH models are designed to address volatility clustering, which explainsmuch of the non-normality of returns. When returns are standardized to the volatility calculations under either of these methods, the returns appear far closer to the normal distribution than non-standardized returns. (If it were not to, then there would have been no point in using these techniques.) Statement II is correct.
Steady state variance under GARCH is defined as # / (1 - # - #), where # and # are the two parameters (called the reaction and persistence coefficient respectively). Clearly, it is affected by more than just the persistence coefficient, therefore statement III is not correct.
Sub-additivity is a very desired property in risk measures. It implies the sum of the parts is greater than the whole. In the case of risk measures, the whole is smaller than the sum of the parts due to diversification.
Statement IV is true.
Therefore the correct answer is Choice 'c'

NEW QUESTION # 292
Loss from a lawsuit from an employee due to physical harm caused while at work is categorized per Basel II as:

A. Execution delivery and process management
B. Unsafe working environment
C. Employment practices and workplace safety
D. Damage to physical assets

Answer: C

Explanation:
Choice 'a' is the correct answer. Refer to the detailed loss event type classification under Basel II (see Annex 9 of the accord). You should know the exact names of all loss event types, and examples of each.

NEW QUESTION # 293
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PRMIA 8011 Exam Practice Material in Three Diverse Versions

Pass Guaranteed 8011 - Credit and Counterparty Manager (CCRM) Certificate Exam Newest Test Topics Pdf

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q288-Q293):

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