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PRMIA Exam IV: Case Studies: Standards: Governance, Best Practices and Ethics - 2015 Edition Sample Questions:
1. Which of the following was NOT a factor in the Long Term Capital Management case?
A) Model risk
B) Changes/breakdowns in historical correlations
C) Unwinding of liquid positions at the beginning of major losses
D) Inadequate separation of front and back offices
2. The retrocession insurance cover was provided by
A) The Fortress Re reinsurers only
B) The fronting insurance companies
C) Fortress Re and their reinsurers
D) Fortress Re and other insurers
3. The Risk Management Infrastructure of an organization must:
I. To the extent possible, avoid silos of control and oversight
II. Have budgets set by the business unit leaders
III. Actively provide ongoing professional development for risk management staff and require them to be committed to standards of best practice, conduct and ethics in their work IV. Provide general risk management and related corporate governance training for employees of the organization as a Whole
A) I and III only
B) I, III and IV only
C) I only
D) All of these are expected of the Risk Management Infrastructure
4. A PRMIA member is offered a highly paid work assignment on the condition that some aspects of assignment are not to be done according to PRMIA standards.
What should they do?
A) Accept the assignment, produce and deliver two reports according to both standards
B) Perform the assignment, noting in the final report the standards to which the assignment was done
C) The PRMIA member should place the integrity of the risk management profession and users of risk management above their own personal interests, and refuse the work
D) Accept the assignment, and prior to doing any work, report the conflict of interest to the organization's compliance department
5. When considering the performance of Northern Rock within its peer group of banks, which of the following is not correct?
A) Only a few months previously it had reported record profits.
B) The quality of its' assets was never in question.
C) For many years it was regarded as a star-performer in the financial markets.
D) Its' loan loss record was poor by industry standards.
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: A | Question # 3 Answer: B | Question # 4 Answer: C | Question # 5 Answer: D |
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