Free PRMIA 8010 Exam Questions

Become PRMIA Certified with updated 8010 exam questions and correct answers

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Total 242 Questions | Updated On: Aug 19, 2026

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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

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 3

Once the frequency and severity distributions for loss events have been determined, which of the following is an accurate description of the process to determine a full loss distribution for operational risk?

A : firm wide operational risk distribution is generated by adding together the frequency and severity distributions

B : firm wide operational risk distribution is generated using Monte Carlo simulations

C : firm wide operational risk distribution is set to be equal to the product of the frequency and severity distributions

D : frequency distribution alone forms the basis for the loss distribution for operational risk

Answer: B

Question 4

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

Question 5

A risk management function is best organized as:

A : tegrated with the risk taking functions as risk management should be a pervasive activity carried out at all levels of theorganization.

B : port independently of the risk taking functions

C : porting directly to the traders, as to be closest to the point at which risks are being taken

D : part of the trading desks and other risk taking teams

Answer: B

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Total 242 Questions | Updated On: Aug 19, 2026

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