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PRMIA 8009 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| PRMIA Standards of Best Practice, Conduct and Ethics | 30% | - Conflict of Interest and Disclosure - Ethical Decision-Making Framework - Whistleblowing and Reporting Violations - Code of Conduct and Professional Responsibilities |
| Risk Management Case Studies | 25% | - China Aviation Oil - Long-Term Capital Management (LTCM) - Orange County - Metallgesellschaft - Baring Bank - Northern Rock |
| Corporate Governance Principles | 25% | - Transparency and Accountability - Risk Governance Structure - PRMIA Governance Principles - Board and Senior Management Oversight |
| Risk Management Best Practices | 20% | - Internal Controls and Risk Limits - Enterprise Risk Management Framework - Compliance and Regulatory Alignment |
PRMIA Exam IV: Case Studies: Standards: Governance, Best Practices and Ethics - 2015 Edition Sample Questions:
1. The problems at WorldCom can best be characterized as related to:
A) Operational and Regulatory Compliance Risk
B) Credit Risk
C) All of the Above
D) Market Risk
2. 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:
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
3. Boards, including Audit and Risk Committees must:
I. Clearly articulate the corporate risk appetite to senior management
II. Thoroughly review compensation plans of potentially "highly compensated positions" for consistency with corporate risk appetite, competitive market conditions and fiduciary responsibility to shareholders III. Have a single member formally given responsibility for understanding and reporting the effectiveness of the corporation's risk management infrastructure IV. Be fully accountable to shareholders and work to the benefit of public good and financial stability
A) I, II and IV only
B) I, II and III only
C) All of these are responsibilities of Board and Audit Committees
D) I and II only
4. 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 combined and therefore did not increase risk.
C) Proprietary and agency trading were combined and therefore did increase risk.
D) Proprietary and agency trading were separate and did increase risk.
5. Which of the following was the key contributory risk factor to the problems at LTCM in the summer of 1998?
I. Model Risk
II. Lack of Transparency
III. Breakdown of Historical Correlations
IV. Over Regulation by Federal Regulators
A) All of these were key elements of the problems at LTCM
B) III and IV only
C) III only
D) I and III only
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: B | Question # 3 Answer: C | Question # 4 Answer: C | Question # 5 Answer: C |
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