Pass Exam Questions Efficiently With 8004 Questions (2023)
8004 Questions - Truly Beneficial For Your PRMIA Exam
NEW QUESTION # 28
The Chair, Vice Chair, Secretary and Treasurer of the PRMIA Board of Directors are elected by:
- A. All PRMIA Fellow Members
- B. The Blue Ribbon Advisory Panel
- C. A two-thirds affirmative vote of all members
- D. The Regional Directors
Answer: D
NEW QUESTION # 29
What was the main type of risk that Metallgesellschaft was exposed to?
- A. Inflation
- B. Basis Risk
- C. Currency Settlement
- D. Interest Rate
Answer: B
NEW QUESTION # 30
What was the main risk scenario on the Metallgesellschaft trading strategy?
- A. The short-term price of the underlying being higher than the long-run contract
- B. The final price of the underlying being higher than the initial price
- C. The initial price of the underlying being higher than the final price
- D. Realized losses on short-term contracts against unrealized gains on the long-run contract
Answer: D
NEW QUESTION # 31
Barings failed to recognize that Nick Leeson's losses were increasing because:
- A. The London office did not ask for any reports
- B. Leeson ran the front office
- C. The margin report sent to London did not show the true margin needs
- D. Leeson hid his trades in a suspense account
Answer: D
NEW QUESTION # 32
According to the Group of 30 Report, option contracts:
- A. Create credit risk only for the buyer (due to default by the seller) provided the premium is due, and paid, at contract initiation
- B. Usually create credit risk only for the seller (to default by the buyer)
- C. Always generate credit risk to both counterparties
- D. Create no credit risk, since the buyer need not exercise the option
Answer: A
NEW QUESTION # 33
Select the one correct statement relative to Barings Bank.
- A. Proprietary and agency trading were separate and therefore did not increase risk.
- B. Proprietary and agency trading were separate and did increase risk.
- C. Proprietary and agency trading were combined and therefore did increase risk.
- D. Proprietary and agency trading were combined and therefore did not increase risk.
Answer: C
NEW QUESTION # 34
The Fortress Re accounting risk transfer procedures
- A. made it straightforward for TFMI to determine when the risk had been transferred and to take out additional catastrophe insurance cover
- B. made it straightforward for TFMI to determine whether risk had actually been transferred and they decided not to take out more catastrophe insurance cover
- C. made it difficult for TFMI to determine whether risk had actually been transferred so they had to take out additional catastrophe insurance cover
- D. made it difficult for TFMI to determine whether risk had actually been transferred and whether it had sufficient catastrophe insurance cover
Answer: D
NEW QUESTION # 35
Which of the following regarding Orange County is FALSE?
- A. Citron's losses were eventually exposed by massive margin calls
- B. Bob Citron tried to "ride the yield curve"
- C. Bob Citron engaged in risky strategies to benefit personally
- D. Bob Citron heavily leveraged his positions using repos
Answer: C
NEW QUESTION # 36
According to the Group of 30 Report, deriving aggregate potential credit exposure for a counterparty by adding up the potential exposure of multiple transactions:
- A. Gives an accurate result in most cases
- B. Captures portfolio effects but not tenor differences
- C. Overstates exposure in most cases
- D. Can easily reflect the impact of netting
Answer: C
NEW QUESTION # 37
Which of the following are PRMIA Governance Principles?
I.Sufficiency of Key Resources and Process II.State of the Art Risk Management Technology III.Ongoing Education and Discernment IV.Sufficiency of Key Competencies
- A. I, II and IV only
- B. I and II only
- C. All of these are PRMIA Governance Principles
- D. I, III and IV only
Answer: D
NEW QUESTION # 38
The problems at WorldCom can best be characterized as related to:
- A. Credit Risk
- B. Market Risk
- C. All of the Above
- D. Operational and Regulatory Compliance Risk
Answer: D
NEW QUESTION # 39
The early 2003 trading strategy of China Aviation oil was
- A. to sell calls and buy puts
- B. to buy puts and sell calls
- C. to sell puts and buy calls
- D. to buy calls and sell puts
Answer: D
NEW QUESTION # 40
The early 2003 trading strategy of China Aviation oil was
- A. to sell calls and buy puts
- B. to buy puts and sell calls
- C. to sell puts and buy calls
- D. to buy calls and sell puts
Answer: D
NEW QUESTION # 41
Taisei Fire and Marine Insurance Co
- A. relied almost entirely on Fortress Re's management team for information on the risks in its portfolio
- B. had a full understanding from Fortress Re of the risks in the pool
- C. had a full understanding from other members of the pool of the pool's liabilities
- D. relied on the information it received from other members of the reinsurance pool to manage its risks
Answer: A
NEW QUESTION # 42
What was the main risk scenario on the Metallgesellschaft trading strategy?
- A. The short-term price of the underlying being higher than the long-run contract
- B. The final price of the underlying being higher than the initial price
- C. The initial price of the underlying being higher than the final price
- D. Realized losses on short-term contracts against unrealized gains on the long-run contract
Answer: D
NEW QUESTION # 43
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