Free PRMIA 8010 Exam Questions

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Total 242 Questions | Updated On: Jul 29, 2025

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Question 1

Under the KMV Moody's approach to calculating expectingdefault frequencies (EDF), firms' default on obligations is likely when:

A : pected asset values one year hence are below total liabilities

B : et values reach a level below short term debt

C : et values reach a level below totalliabilities

D : et values reach a level between short term debt and total liabilities

Answer: D

Question 2

The VaR of a portfolio at the 99% confidence level is $250,000 when mean return is assumed to be zero. If the assumption of zero returns is changed to an assumption of returns of $10,000, what is the revised VaR?

A : 260000

B : 240000

C : 273260

D : 226740

Answer: B

Question 3

Which of the following is true for the actuarial approach to credit risk modeling (CreditRisk+):

A : fault correlations between obligors are accounted for using a multivariate normal model

B : number ofdefaults is modeled using a binomial distribution where the number of defaults are considered discrete events

C : approach considers only default risk, and ignores the risk to portfolio value from credit downgrades

D : approach is based upon historical rating transition matrices

Answer: C

Question 4

The risk that a counterparty fails to deliver its obligation upon settlement while having received the leg owed

to it is called:

A : e-settlement risk

B : edit risk

C : placement risk

D : ttlement risk

Answer: D

Question 5

Which of the following is true in relation to the application of Extreme Value Theory when applied to

operational risk measurement?

I. EVT focuses on extreme losses that are generally not covered by standard distribution assumptions

II. EVT considers the distribution of losses in the tails

III. The Peaks-over-thresholds (POT) and the generalized Pareto distributions are used to model extreme value

distributions

IV. EVT is concerned with average losses beyond a given level of confidence

A : and IV

B : and III

C : II and III

D : II and IV

Answer: C

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Total 242 Questions | Updated On: Jul 29, 2025

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