PRMIA 8004 - PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Exam
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Total 110 questions
Question #11 (Topic: )
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:
unless they meet a set of criteria she has devised with her colleagues. She can do this by
getting which of the following approvals:
A. The Board of Directors, but only if the Blue Ribbon Panel affirms the change
B. The Board of Directors and a majority of the Members
C. The Board of Directors alone
D. 34 of all Members
Answer: B
Question #12 (Topic: )
What was the most important loss for Bankers Trust?
A. Money due to unfavourable market moves
B. Loss of its' reputation due to actions seen as detrimental to their clients
C. Loss of market share due to their licenses being revoked
D. Time spent on legal proceedings in courts
Answer: B
Question #13 (Topic: )
What is (are) the lesson(s) of the Barings' failure?
A. Incentive plans have risk management implications
B. Front and back offices need to be independent
C. Large profits can be an indicator of risk
D. All of the above
Answer: D
Question #14 (Topic: )
According to LTCM managers:
A. Stress Testing looked at the 12 biggest deals with each of their top 20 counterparties
B. Stress Testing was not conducted
C. Stress Testing was not necessary because their trades were hedged
D. Stress Testing was elaborate, complex and conducted on their entire portfolio. It included the assumptions of a major breakdown in historical correlations
Answer: A
Question #15 (Topic: )
An Organization as a Whole must:
I.Provide an environment in which an Escalation Policy can be effective
II.Commit itself to actual enforcement of corporate governance policies
III.Provide ongoing education and training to all employees on the role of risk management
and corporate governance in the organization
IV.Publish an external auditor's opinion that the corporation is in compliance with the
Board's publicly stated Standards of Corporate Governance
I.Provide an environment in which an Escalation Policy can be effective
II.Commit itself to actual enforcement of corporate governance policies
III.Provide ongoing education and training to all employees on the role of risk management
and corporate governance in the organization
IV.Publish an external auditor's opinion that the corporation is in compliance with the
Board's publicly stated Standards of Corporate Governance
A. I, II and III only
B. I, III and IV only
C. I, II and IV only
D. All of these are expectations of the Organization as a Whole
Answer: D
