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PRMIA PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Sample Questions:

1. The Risk Management Infrastructure of an organization must:
I To the extent possible, avoid silos of control and oversight
II Have budgets set by the business unit leaders
III Actively provide ongoing professional development for risk management staff and require them to be committed to standards of best practice, conduct and ethics in their work IV Provide general risk management and related corporate governance training for employees of the organization as a Whole

A) All of these are expected of the Risk Management Infrastructure
B) I only
C) I and III only
D) I, III and IV only


2. Bankgesellschaft Berlin's failures can be best characterised as

A) credit risk caused by a diversified portfolio of poor-quality loans
B) credit risk caused by overexposure to the property market
C) both A and B
D) none of the above


3. Which of the following are PRMIA Governance Principles?
I Independence of Key Parties
II Disclosure and Transparency
III Internal Validation
IV Solvency

A) I, II and III only
B) All are PRMIA Governance Principles
C) I, II and IV only
D) I and II only


4. The early 2003 trading strategy of China Aviation oil was

A) to sell puts and buy calls
B) to buy puts and sell calls
C) to buy calls and sell puts
D) to sell calls and buy puts


5. The problems at Bankgesellschaft Berlin can best be characterized as failures related to:

A) Operational Risk
B) Market Risk
C) Both B and C
D) Credit Risk


Solutions:

Question # 1
Answer: D
Question # 2
Answer: B
Question # 3
Answer: D
Question # 4
Answer: C
Question # 5
Answer: C

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