Free Access PRMIA.8009.v2022-03-04.q40 Practice Test (Page 3)

Question 6

The problems at Bankers Trust can best be characterized as failures related to:

A.Operational and Regulatory Compliance Risk

B.Market Risk

C.All of the Above

D.Credit Risk

Question 7

Boards, including Audit and Risk Committees must:
I. Clearly articulate the corporate risk appetite to senior management
II. Thoroughly review compensation plans of potentially "highly compensated positions" for consistency with corporate risk appetite, competitive market conditions and fiduciary responsibility to shareholders III. Have a single member formally given responsibility for understanding and reporting the effectiveness of the corporation's risk management infrastructure IV. Be fully accountable to shareholders and work to the benefit of public good and financial stability

A.I, II and IV only

B.All of these are responsibilities of Board and Audit Committees

C.I, II and III only

D.I and II only

Question 8

Which of the following regarding Orange County is FALSE?

A.Bob Citron heavily leveraged his positions using repos

B.Citron's losses were eventually exposed by massive margin calls

C.Bob Citron engaged in risky strategies to benefit personally

D.Bob Citron tried to "ride the yield curve"

Question 9

MGRM's losses due to "stacking" started to increase when

A.the oil market went from contango to backwardation

B.the oil market went from weak backwardation to strong backwardation

C.the oil market went from backwardation to contango

D.the oil market went from strong contango to weak contango

Question 10

Employees shall be remunerated adequately for the roles that they perform, where 'adequately' is defined

A.using external references and benchmarks, and in a framework which is consistent with the type of risk-taking behavior expected of employees

B.as commensurate with policies to attract and retain high income / revenue earners

C.as being the market norm for similarly situated personnel in competitive organizations

D.using the risk reward profile for each business line in the organization

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Question 6

Question 7

Question 8

Question 9

Question 10

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