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PRMIA 8009 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Risk Management Best Practices | 20% | - Enterprise Risk Management Framework - Internal Controls and Risk Limits - Compliance and Regulatory Alignment |
| Risk Management Case Studies | 25% | - China Aviation Oil - Baring Bank - Northern Rock - Long-Term Capital Management (LTCM) - Metallgesellschaft - Orange County |
| Corporate Governance Principles | 25% | - Board and Senior Management Oversight - PRMIA Governance Principles - Risk Governance Structure - Transparency and Accountability |
| PRMIA Standards of Best Practice, Conduct and Ethics | 30% | - Conflict of Interest and Disclosure - Code of Conduct and Professional Responsibilities - Whistleblowing and Reporting Violations - Ethical Decision-Making Framework |
PRMIA Exam IV: Case Studies: Standards: Governance, Best Practices and Ethics - 2015 Edition Sample Questions:
1. The financial intermediary services provided by Fannie Mae and Freddie Mac were designed to
A) Offer loans directly to the consumer
B) Compete directly with banks in selling mortgaged to would-be home owners
C) Buy mortgage-backed loans for banks and keep them all on their books, using them as collateral for the US government to borrow
D) Repackage mortgage loans made by banks and sell them on to investors as asset backed securities
2. In the case of National Australia Bank, which of the following was present?
A) A window of time between close of day for reporting purposes and back office checking that allowed traders to hide losses using fictitious trades
B) The Board received risk management information that was incorrect, incomplete or insufficiently detailed
C) Neither A nor B
D) Both A and B
3. The problems at Bankgesellschaft Berlin can best be characterized as failures related to:
A) Operational Risk
B) Market Risk
C) Credit Risk
D) Both B and C
4. John Smith wants to run for election to the Board of Directors of PRMIA. To be nominated, he needs:
A) To go through a screening process conducted by the Nominations Committee
B) The backing of three other members
C) The backing of 6% of local members
D) The backing of five other members and to be serving on at least one PRMIA Committee
5. PwC concluded that the accounting policy adopted by China Aviation Oil was incorrect because it
A) took into account both the intrinsic value and the time value
B) only regarded the intrinsic value (i.e. the difference between the strike price and the forward price of the underlying commodity) as the fair value of its options
C) used neither the intrinsic value nor the time value
D) only took into account the time value of the option (which includes recognizing the time left to maturity of the option, the volatility of the spot price of the underlying commodity, interest rates and other factors)
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: B | Question # 5 Answer: B |
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