Free Online PRMIA 8010 Practice Test

Prepare Your PRMIA 8010 Exam Questions with Free online 8010 Practice Test. Get Brilliant Operational Risk Manager (ORM) Exam Results with Valid 8010 Exam Dumps.

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Total 242 Questions | Updated On: May 13, 2024

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Question 1

The key difference between 'top down models' and 'bottom up models' foroperational risk assessment is:

A : Top down approaches to operational risk are based upon an analysis of key risk drivers, while bottom up approaches consider causality in risk scenarios.

B : Bottom up approaches to operational risk are based upon an analysis of key risk drivers, while top down approaches consider causality in risk scenarios.

C : Bottom up approaches to operational risk calculate the implied operational risk using available data such as income volatility, capital etc; while top down approaches use causal factors, risk drivers and other factors to get an aggregated estimate of risk

D : Top down approaches to operational risk calculate the implied operational risk using available data such as income volatility, capital etc; while bottom up approaches use causal factors, risk drivers and other factors to get an aggregated estimate of risk.

Answer: D

Question 2

The frequency distribution for operational risk loss events can be modeled by which of the following

distributions:

I. The binomial distribution

II. The Poisson distribution

III. The negative binomial distribution

IV. The omega distribution

A : I, II and III

B : I and III

C : I, III and IV

D : I, II, III and IV

Answer: A

Question 3

There are two bonds in a portfolio, each with a marketvalue of $50m. The probability of default of the two bonds over a one year horizon are 0.03 and 0.08 respectively. If the default correlation is zero, what is the one year expected loss on this portfolio?

A : $11m

B : $5.26m

C : $5.5m

D : $1.38m

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 : Pre-settlement risk

B : Credit risk

C : Replacement risk

D : Settlement risk

Answer: D

Question 5

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

Page: 1 / 49

Total 242 Questions | Updated On: May 13, 2024

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