PRMIA 8004 Exam Practice Test Instant Access

Question 1

Which of the following best characterizes the problems that developed at Bankgesellschaft Berlin?

AVolume growth at the expense of margin.

BExcessive reliance on volatile trading income.

CBanking is a 'for-profit' business, not a means of fulfilling political goals.

DA company culture where profits may justify 'excesses.'

Answer : C

Question 2

Which of the following does NOT relate to the Orange County case?

AWhere there are excess rewards, there must be risks

BThe Know Your Customer rule

CStrategies that are not possible to explain to third parties should not be employed by the risk averse

DFractured organisational structure and poor risk oversight mechanism make it easy for powerful individuals to hide risk in the gaps

Answer : B

Question 3

As LTCM started to have major losses, it compounded its problems by doing what?

ATrying to borrow more money from major money centre banks

BIssuing Subordinated Debt

CReturning capital to the general partners before others

DUnwinding its' more liquid trades thereby creating more liquidity risk overall

Answer : D

Question 4

What was the main type of risk that Metallgesellschaft was exposed to?

ABasis Risk

BCurrency Settlement

CInterest Rate

DInflation

Answer : A

Question 5

The key people involved in the application of good governance and risk management must:

i. be trustworthy

II.be honest

III.be approved by the local regulator

IV.treat others fairly at all times

AI, II, and III only

BIII only

CI, II, and IV only0

DI, II, III and IV above

Answer : C

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PRMIA Case Studies; Standards: Governance, Best Practices and Ethics Exam Practice Test

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PRMIA Case Studies; Standards: Governance, Best Practices and Ethics Exam Practice Test

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