Provide Valid 8004 Dumps To Help You Prepare For PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Exam Dec 31, 2023 [Q36-Q54] : Free Exam Dumps Collection : http://free.examcollectionpass.com

QUESTION 36
Which of the following regarding Orange County is FALSE?

Bob Citron engaged in risky strategies to benefit personally

Bob Citron tried to “ride the yield curve”

Bob Citron heavily leveraged his positions using repos

Citron’s losses were eventually exposed by massive margin calls

QUESTION 37
The Q4 2003 trading strategy of China Aviation Oil was

to buy puts and sell calls

to buy calls and sell puts

to sell puts and buy calls

to sell calls and buy puts

QUESTION 38
Which of the following was NOT a factor in the National Australia Bank case?

Rogue traders

Improper or insufficient Board-level communication regarding the importance of risk management and oversight

Inadequate back office procedures

Money laundering using foreign exchange trades for political leaders

QUESTION 39
For the sentence
“The organization should have at its disposal employees who have adequate _________, ________ and _______ to perform the tasks assigned to them”,
Choose the correct combination of words from the following options:

knowledge, skills, expertise

experience, skills, previous successes

risk appetite, knowledge, expertise

track record, expertise, skills

QUESTION 40
Which of the following was not received by Northern Rock as official support from the UK banking and government authorities?

A covert money market support operation designed to cover up the difficulties Northern Rock was facing

The Bank of England’s role as Lender-Of-Last-resort was activated at a penalty interest rate of 150 basis points above the Bank Rate

The UK government offered to guarantee all existing and new retail deposits, and to most other creditors

The Bank of England provided an additional unlimited facility secured on the collateral of all Northern Rock assets

QUESTION 41
How much of Washington Mutual’s assets were funded by customer deposits for the decade ending in 2006?

30%

40%

50%

60%

QUESTION 42
The financial intermediary services provided by Fannie Mae and Freddie Mac were designed to

Offer loans directly to the consumer

Compete directly with banks in selling mortgaged to would-be home owners

Repackage mortgage loans made by banks and sell them on to investors as asset backed securities

Buy mortgage-backed loans for banks and keep them all on their books, using them as collateral for the US government to borrow

QUESTION 43
What is (are) the lesson(s) of the Barings’ failure?

Incentive plans have risk management implications

Front and back offices need to be independent

Large profits can be an indicator of risk

All of the above

QUESTION 44
The Chair, Vice Chair, Secretary and Treasurer of the PRMIA Board of Directors are elected by:

All PRMIA Fellow Members

The Regional Directors

The Blue Ribbon Advisory Panel

A two-thirds affirmative vote of all members

QUESTION 45
The Chief Risk Officer is responsible for the management of the Risk Management Infrastructure, and as such helps the Board define, and then implements throughout the organization, the risk appetite of the organization.
Which of the following is also the responsibility of the Chief Risk Officer?

Maintaining appropriate assurance measures to ensure that the Governance and Risk framework of the organization is effective, and, if any shortcomings are discovered, to escalate these to the Board so that remedial action can be taken in an appropriate and timely manner

ensuring that all employees understand the rules and regulations (both internal and external) with which they must comply and the implications, for them and for the organization, of non-compliance

Ensures that reporting of risk and governance-related matters are produced in a timely and accurate manner

Acts as sponsor for risk throughout the organization and ensures that a risk culture is implemented, and maintained

QUESTION 46
Up until 2006, which of the following was not a primary driver for Washington Mutual’s earning?

Lending to consumers and small businesses.

Deposit taking activities which generated net interest income.

The provision of fee based services to its customers.

Complex derivative trades based on volatility indices.

QUESTION 47
Which of the following are PRMIA Governance Principles?
I Independence of Key Parties
II Disclosure and Transparency
III Internal Validation
IV Solvency

I and II only

I, II and III only

I, II and IV only

All are PRMIA Governance Principles

QUESTION 48
Washington Mutual’s acquisition of Long Beach Financial changed its business model and increased its credit loss profile because

The resulting loss rate for Washington Mutual was more than 3 times higher than other mortgage lenders tracked by the FDIC

the two banks were focussed in different markets

Long Beach Financial had losses which it hadn’t realized at the time of the takeover

Of a general deterioration of credit quality generally

QUESTION 49
Which of the following would have contributed to noticing and preventing Leeson’s violations at Barings?

Separation of front and back offices

More senior level involvement at Barings regarding use of derivatives

Recognition that large profits can be an indicator of higher risk

All of the above

QUESTION 50
A risk manager finds that a client is engaged in a practice that looks like money laundering.
According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), the risk manager should:

Approach the client about the concern, regardless of what their reaction might be

Respect the client’s confidentiality as that takes precedence

Report this conduct to their immediate supervisor

Report the findings immediately to authorities

QUESTION 51
Which of the following are PRMIA Governance Principles?
I Sufficiency of Key Resources and Process
II State of the Art Risk Management Technology
III Ongoing Education and Discernment
IV Sufficiency of Key Competencies

I, II and IV only

I and II only

I, III and IV only

All of these are PRMIA Governance Principles

QUESTION 52
The Chair of the PRMIA Board of Directors may hold the following offices:

Parliamentarian

Secretary

Vice Chair

Chair only

QUESTION 53
The problems at WorldCom can best be characterized as related to:

Market Risk

Credit Risk

Operational and Regulatory Compliance Risk

All of the Above

QUESTION 54
Which US regulatory authority resolved the restructuring of Washington Mutual?

The Office of Thrift Supervision

Federal Deposit Insurance Corporation

The Federal Reserve Bank

None of the above