Free PRMIA 8020 Exam Dumps Questions & Answers

What are the roles of business versus risk management in developing and implementing risk assessments?

• A.  Business owns the risk assessment process so risk management does not play a role in the process.
• B.  Risk management, in its role as second line of defense, performs the risk assessment process from beginning to end. There is no business line involvement.
• C.  The business owns the risk assessment process, while risk management develops the framework, helps facilitate the process, and provides supervision and oversight.
• D.  Business management's role in the risk assessment process should be confined to oversight.

For credit risk losses containing operational risk elements that have been historically included in an organizations' credit risk database how should the loss amount be treated?

• A.  The entire loss amount is treated as operational risk.
• B.  The loss amount is split into credit and operational risk components.
• C.  The entire loss amount is treated as credit risk, but the loss is entered as a memorandum within the operational loss database and not used for capital modeling purposes.
• D.  The entire loss amount is treated as credit risk

For the TSB case what was the cause of the outage at the heart of the case?

• A.  Sub-standard risk pricing and risk management left millions of people locked out of their accounts for weeks.
• B.  Their IT models did not work if prices were discontinuous.
• C.  A liquidity squeeze by a major hedge-fund via margin calls on trading positions resulted in the collapse of their website.
• D.  A failed attempts to move customers to a new IT system left millions of people locked out of their accounts for weeks.

Confidence Accounting can be defined as:

• A.  An approach that encourages companies and audit firms to use ranges, rather than discrete numbers, for major accounting entries.
• B.  An approach that encourages companies and audit firms to stop using figures and maths.
• C.  An approach that encourages companies and audit firms to use regular statements in their Al software.
• D.  An approach that encourages companies and audit firms to have diverse boards.

For the Northern Rock case study, what was the low-probability-high-impact event that was most responsible for the loss event?

• A.  The Bank of England's withdrawal of Deposit Protection.
• B.  The acquisition of Merrill Lynch by Bank of America.
• C.  Liquidity dried up in the inter-bank and commercial paper markets.
• D.  An exposure to real estate funds, heavily concentrated in Berlin.