PRMIA 8004 Exam Questions - Real Practice Questions for Guaranteed Success

Question 1

A risk manager is asked to analyze the credit risk of a convertible bond. The risk manager has never analyzed convertible bonds, but does have significant expertise in credit risk. The risk manager accepts the assignment, finds a paper on the subject through the PRMIA web site and copies the method used there. The risk manager completes the assignment and delivers a report to his or her direct supervisor and the supervisor is quite pleased.

According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), this was acceptable behavior if the following conditions were met:

I The risk manager disclosed the lack of knowledge about convertible bonds

II The methodology employed is disclosed and explained

III The report was just to be used for analysis and not in practice

IV The risk manager was sure of his/her understanding of the paper found on the web

AI and II

BI, II and IV

CI, II and III

DI only

Correct : A

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AI and II

BI, II and IV

CI, II and III

DI only

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Question 2

A risk manager finds that a client is engaged in a practice that looks like money laundering.

According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), the risk manager should:

AApproach the client about the concern, regardless of what their reaction might be

BRespect the client's confidentiality as that takes precedence

CReport this conduct to their immediate supervisor

DReport the findings immediately to authorities

Correct : C

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AApproach the client about the concern, regardless of what their reaction might be

BRespect the client's confidentiality as that takes precedence

CReport this conduct to their immediate supervisor

DReport the findings immediately to authorities

0 / 1500

Question 3

A risk manager has just completed a risk assessment project. The report has been given to the risk manager's direct supervisor, who refuses to escalate the material issues raised in the report. Further, the direct supervisor edits the report to remove the section describing the material risk, who then submits it to the firm's Executive Committee.

According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), which of the following actions is most appropriate:

AThe risk manager has submitted the report to their direct supervisor and their obligation ends at this point, nothing further should be done

BThe risk manager should attempt to resolve the conflict with the direct supervisor, but if that does not work, they should contact the Whistle-Blowing Hotline of the organization. If no such hot-line is in place, they should contact the PRMIA Ethics Committee

CEscalation of the issue is against the Code of Conduct because one should respect the administrative structure of the organization

DIf the risk manager deems it appropriate, he / she should send a copy of the original report to the CEO

Correct : B

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AThe risk manager has submitted the report to their direct supervisor and their obligation ends at this point, nothing further should be done

CEscalation of the issue is against the Code of Conduct because one should respect the administrative structure of the organization

DIf the risk manager deems it appropriate, he / she should send a copy of the original report to the CEO

0 / 1500

Question 4

With respect to the Purpose of Professional Standards, in the event of any difference in standards between local laws/rules and those of PRMIA, members must

Ause their best judgment

Babide by the applicable laws, rules, and regulations of PRMIA and any government and/or regulatory bodies

Ccomply with the higher standard under all circumstances

Drefer the matter to their supervisor

Correct : C

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Ause their best judgment

Babide by the applicable laws, rules, and regulations of PRMIA and any government and/or regulatory bodies

Ccomply with the higher standard under all circumstances

Drefer the matter to their supervisor

0 / 1500

Question 5

Boards of Directors, including Audit and Risk Committees must review thoroughly compensation plans of potentially "highly compensated positions" for:

I competitive market conditions

II ensuring compliance with their corporate risk appetite and fiduciary responsibility to shareholders

III ensuring any discretionary bonus plans are geared towards keeping high income / revenue generators

IV reporting all such personnel to the local regulator

AII, III and IV only

BI, II and IV only

CAll of the above

DI and II only

Correct : D

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AII, III and IV only

BI, II and IV only

CAll of the above

DI and II only

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Master PRMIA 8004 Exam with Reliable Practice Questions

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