Most UptoDate PRMIA 8004 Exam Dumps PDF 2024 [Q11-Q28]

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Most UptoDate PRMIA 8004 Exam Dumps PDF 2024

100% Free PRM 8004 Dumps PDF Demo Cert Guide Cover

QUESTION 11
MGRM’s losses due to “stacking” started to increase when

the oil market went from contango to backwardation

the oil market went from backwardation to contango

the oil market went from weak backwardation to strong backwardation

the oil market went from strong contango to weak contango

QUESTION 12
As a result of the US government’s intervention, which of the following is true?

The cost of borrowing for Fannie Mae and Freddie Mac should decline because the government will be standing behind their debts and the buying and selling of mortgage debt will continue

The cost of borrowing for house buyers will rise because of the risk premium now built into the cost of such a government guarantee

The systemic risks still remain in the housing market because it increases the US government’s debt

Foreign Central Banks will continue to sell their holdings of Fannie Mae and Freddie Mac securities

QUESTION 13
The early 2003 trading strategy of China Aviation oil was

to buy calls and sell puts

to buy puts and sell calls

to sell puts and buy calls

to sell calls and buy puts

QUESTION 14
The failure of Washington Mutual was NOT due to which one of the following?

Using a combination of subprime mortgage loans and credit cards

It failed due to the poor quality of its assets

Low lending standards and bad quality acquisitions

A run on its deposits by bank customers

QUESTION 15
Which US regulatory authority resolved the restructuring of Washington Mutual?

The Office of Thrift Supervision

Federal Deposit Insurance Corporation

The Federal Reserve Bank

None of the above

QUESTION 16
The Fortress Re accounting risk transfer procedures

made it straightforward for TFMI to determine whether risk had actually been transferred and they decided not to take out more catastrophe insurance cover

made it difficult for TFMI to determine whether risk had actually been transferred so they had to take out additional catastrophe insurance cover

made it straightforward for TFMI to determine when the risk had been transferred and to take out additional catastrophe insurance cover

made it difficult for TFMI to determine whether risk had actually been transferred and whether it had sufficient catastrophe insurance cover

QUESTION 17
What was the main risk scenario on the Metallgesellschaft trading strategy?

Realized losses on short-term contracts against unrealized gains on the long-run contract

The final price of the underlying being higher than the initial price

The initial price of the underlying being higher than the final price

The short-term price of the underlying being higher than the long-run contract

QUESTION 18
Which of the following CANNOT be counted as a reason why LTCM was given a rescue package and not left to default?

Many of the banks in the rescue consortium were among LTCM’s counterparties

Some of the banks in the rescue consortium were LTCM investors

Untimely unwinding of some LTCM positions would lead to large market fluctuations and possible turmoil

The consortium wanted to keep this out of the regulators’ eyes

QUESTION 19
With a PRMIA member’s need to reconcile their internal and external responsibility to perform their work in an independent and appropriate fiduciary manner, which of the following options must be taken into consideration when performing risk management duties?

Internal controls of the organization, and the local regulator

Internal controls, and the expectations of stakeholders, shareholders, and the general public

The local regulator, internal controls, and shareholders

Only the internal controls and compliance standards

QUESTION 20
With a PRMIA member’s need to reconcile their internal and external responsibility to perform their work in an independent and appropriate fiduciary manner, which of the following options must be taken into consideration when performing risk management duties?

Internal controls of the organization, and the local regulator

Internal controls, and the expectations of stakeholders, shareholders, and the general public

The local regulator, internal controls, and shareholders

Only the internal controls and compliance standards

QUESTION 21
PRMIA is incorporated as:

A for-profit corporation

A non-profit corporation

A charitable trust

A non profit corporation with for profit subsidiaries

QUESTION 22
Mary Jones wants the Bylaws of PRMIA to be changed so that people can’t join PRMIA unless they meet a set of criteria she has devised with her colleagues. She can do this by getting which of the following approvals:

The Board of Directors, but only if the Blue Ribbon Panel affirms the change

The Board of Directors and a majority of the Members

The Board of Directors alone

34 of all Members

QUESTION 23
The Bankers Trust Case Study is about:

overexposure to the real estate market

large losses at the proprietary trading desk

reliance on thinly traded derivatives to hedge

failure to guard its clients’ best interests

QUESTION 24
According to the Northern Rock Case Study, what is Forced Insolvency?

The bank is insolvent in that the current value of its assets (measured at book value) is less than the value of its liabilities; thus even if the bank were to liquidate all of its assets it would not be able to repay all depositors and other creditors

The bank is legally solvent but if, because it cannot fund its operations, it is forced to liquidate assets it could do so only at less than nominal values (fire sale) and this would make it legally insolvent (value of assets falls below those of liabilities)

The bank is legally solvent but its current funding costs (which are likely to continue) exceed the average rate of return on its assets and hence it would soon become insolvent as it would be making losses and would eventually exhaust its equity capital

The bank is solvent in that the current value of its assets (measured at book value) is more than the value of its liabilities; so even if the bank were to liquidate all of its assets it would be able to repay all depositors and other creditors

QUESTION 25
Which is NOT part of the guidance on Professional Conduct in the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct)?

Know and abide by applicable rules and regulations

Clearly inform all affected parties of any apparent or actual conflicts of interest

Report to the Regulator any departures from generally accepted methodology or practices

Provide advice that is clear and accurate

QUESTION 26
What is (are) the lesson(s) of the Barings’ failure?

Incentive plans have risk management implications

Front and back offices need to be independent

Large profits can be an indicator of risk

All of the above

QUESTION 27
Which of the following regarding Orange County is FALSE?

Bob Citron engaged in risky strategies to benefit personally

Bob Citron tried to “ride the yield curve”

Bob Citron heavily leveraged his positions using repos

Citron’s losses were eventually exposed by massive margin calls

QUESTION 28
When supervising others, a PRMIA member must comply with

PRMIA Standards

the standards of the organization where the work is being performed

his / her established personal standards of work approved in previous work situations

local regulatory authority standards which may be less onerous than PRMIA standards

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