[Oct 01, 2023] 8004 Exam Dumps – 100% Marks In 8004 Exam! [Q18-Q37]

8004 PRMIA

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[Oct 01, 2023] 8004 Exam Dumps – 100% Marks In 8004 Exam!

Exam Dumps Use Real PRM Dumps With 112 Questions!

NO.18 According to the Group of 30 Report, important risks associated with dynamic hedging are:

Greater volatility than expected over the life of an option

Sudden gaps in market prices

Both A and B

Neither A nor B

NO.19 As LTCM started to have major losses, it compounded its problems by doing what?

Trying to borrow more money from major money centre banks

Issuing Subordinated Debt

Returning capital to the general partners before others

Unwinding its’ more liquid trades thereby creating more liquidity risk overall

NO.20 Which of the following was NOT a factor in the WorldCom collapse?

Failed corporate governance

Accounting abuses

Unfair pricing to customers

Over stating actual sales

NO.21 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

NO.22 Which of the following best characterizes the problems that developed at Bankgesellschaft Berlin?

Volume growth at the expense of margin.

Excessive reliance on volatile trading income.

Banking is a “for-profit” business, not a means of fulfilling political goals.

A company culture where profits may justify “excesses.”

NO.23 Which of the following was a key problem in the Barings Bank case?

Having the back office and front office operations under the same person

Difference in the contract sizes in the OSE and SIMEX

The different time zones that the office was trading in

Leeson was executing an arbitrage strategy even though he was not authorized to do so

NO.24 National Australia Bank and Barings cases are similar in that:

Losses kept increasing while rogue trader(s) hid their positions

The back offices had inadequate procedures

Both A and B

None of the above

NO.25 Which of the following does NOT relate to the Orange County case?

Where there are excess rewards, there must be risks

The Know Your Customer rule

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

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

NO.26 According to the PwC report China Aviation Oil, in order to avoid recording and reporting losses, the company adopted which approach covering up its losses?

selling short-term options with extremely low-risk profiles to generate premiums to cover the cost of closing out loss-making option positions

selling long-term options with extremely low-risk profiles to generate premiums to cover the cost of closing out loss-making option positions

selling short-term options with extremely high-risk profiles to generate premiums to cover the cost of closing out loss-making option positions

selling long-term options with extremely high-risk profiles to generate premiums to cover the cost of closing out loss-making option positions

NO.27 What was the most important loss for Bankers Trust?

Money due to unfavourable market moves

Loss of its’ reputation due to actions seen as detrimental to their clients

Loss of market share due to their licenses being revoked

Time spent on legal proceedings in courts

NO.28 The “Renewing the Dream” program signed into law by President George W Bush in 2002 was designed to

Recapitalise Fannie Mae and Freddie Mac with US$2.4 billion of additional capital to ensure they weathered the risks associated with any future downturn in the housing markets

Provide grants of US$800 million to help home buyers with down-payment and closing costs

Allow risky, high-cost loans to be credited towards affordable housing goals

Provide tax credits of nearly US$2.4 billion over the next 5 years to investors and builders who developed affordable single-family housing in poor and distressed areas

NO.29 Zheng Zhu wants to open a new PRMIA Chapter in Wuhan, Chin
a. He can do this if:

At least 100 members live within 50 miles

A local business sponsors the chapter

Approved by the Board of Directors

All of the above

NO.30 Which of the following would have contributed to noticing and preventing Leeson’s violations at Barings?

Separation of front and back offices

More senior level involvement at Barings regarding use of derivatives

Recognition that large profits can be an indicator of higher risk

All of the above

NO.31 The Basic Knowledge a PPRMIA member should comply with, as stipulated within the PRMIA Standards of Best Practice, Conduct & Ethics, is to

only improve their PERSONAL professional competence

maintains and improve their professional competence and strive to maintain and improve the competence of other risk professionals

only possess the required skills and/or certification to complete the risk assessment / management work at hand

learn from a qualified risk management practitioner

NO.32 Which of the following is part of the Group of 30 Report’s market risk and stress testing recommendations?

To be consistent with regulatory capital measures, 10-day holding periods should be standardized for VaR reporting

Historic simulations are not effective methods of stress testing

Stress tests should incorporate changes in liquidity

Market risk VaR measures should be multiplied by 3 to get to a stress test figure, as long as the VaR model has been back-tested

NO.33 The “Renewing the Dream” program signed into law by President George W Bush in 2002 was designed to

Recapitalise Fannie Mae and Freddie Mac with US$2.4 billion of additional capital to ensure they weathered the risks associated with any future downturn in the housing markets

Provide grants of US$800 million to help home buyers with down-payment and closing costs

Allow risky, high-cost loans to be credited towards affordable housing goals

Provide tax credits of nearly US$2.4 billion over the next 5 years to investors and builders who developed affordable single-family housing in poor and distressed areas

NO.34 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

NO.35 The problems at Bankgesellschaft Berlin can best be characterized as failures related to:

Market Risk

Credit Risk

Operational Risk

Both B and C

NO.36 The problems at WorldCom can best be characterized as related to:

Market Risk

Credit Risk