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PRMIA 8004 Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Standards & Practices | - Bylaws of Professional Risk Managers' International Association, PRMIA - Standards of Best Practice, Conduct and Ethics, PRMIA Ethics Committee - Principles of Good Governance Principles, PRMIA - Group of Thirty Best Practices, Global Derivatives Study Group |
| Case Studies | - Long Term Capital Management (LTCM) - Lehman Brothers - National Australia Bank (NAB) - FX Options - FTX - WorldCom - Fannie Mae and Freddie Mac - American Insurance Group (AIG) - Operational Resilience at TSB - Washington Mutual (Wamu) - Silicon Valley Bank - Northern Rock - Orange County - Barings - Bankers Trust - Metallgesellschaft |
PRMIA PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Sample Questions:
Several clients, including Procter and Gamble took legal action against Bankers Trust, claiming Bankers Trust
- A. did not honour its contractual obligations to pay
- B. hid profits
- C. sold them derivative products without properly advising them of the relevant risks
- D. was involved in accounting fraud
Correct Answer: C 🗳️
What was the main type of risk that Metallgesellschaft was exposed to?
- A. Basis Risk
- B. Currency Settlement
- C. Inflation
- D. Interest Rate
Correct Answer: A 🗳️
The early 2003 trading strategy of China Aviation oil was
- A. to sell puts and buy calls
- B. to buy puts and sell calls
- C. to sell calls and buy puts
- D. to buy calls and sell puts
Correct Answer: D 🗳️
National Australia Bank and Barings cases are similar in that:
- A. Losses kept increasing while rogue trader(s) hid their positions
- B. Both A and B
- C. The back offices had inadequate procedures
- D. None of the above
Correct Answer: B 🗳️
What was the main risk scenario on the Metallgesellschaft trading strategy?
- A. Realized losses on short-term contracts against unrealized gains on the long-run contract
- B. The short-term price of the underlying being higher than the long-run contract
- C. The final price of the underlying being higher than the initial price
- D. The initial price of the underlying being higher than the final price
Correct Answer: A 🗳️
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