PRMIA 8010 Operational Risk Manager (ORM) Exam Online Training
PRMIA 8010 Online Training
The questions for 8010 were last updated at Apr 27,2024.
- Exam Code: 8010
- Exam Name: Operational Risk Manager (ORM) Exam
- Certification Provider: PRMIA
- Latest update: Apr 27,2024
Which of the following statements are correct?
I. A reliance upon conditional probabilities and a-priori views of probabilities is called the ‘frequentist’ view
II. Knightian uncertainty refers to things that might happen but for which probabilities cannot be evaluated
III. Risk mitigation and risk elimination are approaches to reacting to identified risks
IV. Confidence accounting is a reference to the accounting frauds that were seen in the past decadeas a reflection of failed governance processes
- A . II, III and IV
- B . II and III
- C . I and IV
- D . All of the above
Under the standardized approach to calculating operational risk capital under Basel II, negative regulatory capital charges for any of the business units:
- A . Should be ignored completely
- B . Should be offset against positive capital charges from other business units
- C . Should be included after ignoring the negative sign
- D . Should be excluded from capital calculations
Credit exposure for derivatives is measured using
- A . Current replacement value
- B . Notional value of the derivative
- C . Forward looking exposure profile of the derivative
- D . Standard normal distribution
Which of the following are valid approaches for extreme value analysis given a dataset:
I. The Block Maxima approach
II. Least squares approach
III. Maximum likelihood approach
IV. Peak-over-thresholds approach
- A . II and III
- B . I, III and IV
- C . I and IV
- D . All of the above
Which of the following formulae describes Marginal VaR for a portfolio p, where V_i is the value of the i-th asset in the portfolio? (All other notation and symbols have their usual meaning.)
A)
B)
C)
D)
All of the above
- A . Option A
- B . Option B
- C . Option C
- D . Option D
Which of the following should be included when calculating the Gross Income indicator used to calculate operational risk capital under the basic indicator and standardized approaches under Basel II?
- A . Insurance income
- B . Operating expenses
- C . Fees paid to outsourcing service proviers
- D . Net non-interest income
A loan portfolio’s full notional value is $100, and its value in a worst case scenario at the 99% level of confidence is $65. Expected losses on the portfolio are estimated at 10% .
What is the level of economic capital required to cushion unexpected losses?
- A . 25
- B . 65
- C . 10
- D . 35
Which of the following can be used to reduce credit exposures to a counterparty:
I. Netting arrangements
II. Collateral requirements
III. Offsetting trades with other counterparties
IV. Credit default swaps
- A . I and II
- B . I, II, III and IV
- C . I, II and IV
- D . III and IV
Which of the following is NOT an approach used to allocate economic capital to underlying business units:
- A . Stand alone economic capital contributions
- B . Marginal economic capital contributions
- C . Fixed ratio economic capital contributions
- D . Incremental economic capital contributions
For a given notional amount, which of the following carries the greatest counterparty exposure (assuming the same counterparty credit rating for each):
- A . A futures contract on an equity index
- B . A one year certificate of deposit
- C . A one year forward foreign exchange contract
- D . A one year interest rate swap
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