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PRMIA 8004 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| PRMIA Principles of Good Governance | 20% | - Risk appetite and accountability - Transparency and disclosure - Risk governance frameworks - Board and senior management responsibilities |
| PRMIA Standards of Best Practice, Conduct and Ethics | 30% | - Ethical decision-making framework - Professional integrity and accountability - Code of professional conduct - Compliance with laws and regulations |
| PRMIA Case Studies | 50% | - Application of risk principles to scenarios - Historical risk failure analysis - Root cause identification - Risk management lessons learned |
PRMIA PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Sample Questions:
Question #1
Barings Bank and Orange County have many similarities. Which of the following is NOT a similarity?
A. Both relied on a star manger, supposedly in a low risk business.
B. Both losses grew over time, but were not discovered by management until too late.
C. Both traded in illiquid and obscure markets that were easy to manipulate.
D. Both losses were eventually exposed by massive margin calls.
Question #2
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. relied on the information it received from other members of the reinsurance pool to manage its risks
D. had a full understanding from other members of the pool of the pool's liabilities
Question #3
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.
Question #4
What was the most important loss for Bankers Trust?
A. Loss of its' reputation due to actions seen as detrimental to their clients
B. Time spent on legal proceedings in courts
C. Money due to unfavourable market moves
D. Loss of market share due to their licenses being revoked
Question #5
Which of the following CANNOT be counted as a reason why LTCM was given a rescue package and not left to default?
A. Many of the banks in the rescue consortium were among LTCM's counterparties
B. Untimely unwinding of some LTCM positions would lead to large market fluctuations and possible turmoil
C. The consortium wanted to keep this out of the regulators' eyes
D. Some of the banks in the rescue consortium were LTCM investors
Solutions:
| Question #1 Correct Answer: C | Question #2 Correct Answer: A | Question #3 Correct Answer: C | Question #4 Correct Answer: A | Question #5 Correct Answer: C |



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