8009 by PRMIA Valid Free Exam Practice Test

Question 1

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

A. All PRMIA Fellow Members B. A two-thirds affirmative vote of all members C. The Regional Directors D. The Blue Ribbon Advisory Panel

Correct Answer: C

Question 2

While doing a work assignment, a PRMIA member notices behaviour that is outside the ethical standards of their client organization and reports the matter to their immediate supervisor in the organization (if he or she wasn't the one engaging in such behaviour). The matter is neither progressed nor actioned.
The PRMIA member should:

A. contact the Whistle-Blowing Hotline of the organization or, if none exits, to the PRMIA Ethics Committee for guidance and assistance B. stay silent on the basis that they have reported it C. report the matter to their PRMIA chapter D. report the matter to the organization's Compliance Dept.

Correct Answer: A

Question 3

What was the most important loss for Bankers Trust?

A. Loss of its' reputation due to actions seen as detrimental to their clients B. Money due to unfavourable market moves C. Time spent on legal proceedings in courts D. Loss of market share due to their licenses being revoked

Correct Answer: A

Question 4

The key people involved in the application of good governance and risk management must:
I. be trustworthy
II. be honest
III. be approved by the local regulator
IV. treat others fairly at all times

A. III only B. I, II, and IV only C. I, II, III and IV above D. I, II, and III only

Correct Answer: B

Question 5

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

A. the oil market went from weak backwardation to strong backwardation B. the oil market went from backwardation to contango C. the oil market went from strong contango to weak contango D. the oil market went from contango to backwardation

Correct Answer: B

Question 6

The condition where futures prices of an underlying asset are lower than cash (spot) prices is known as:

A. Reverse backwardation B. Conchacha C. Backwardation D. Contango

Correct Answer: C

Question 7

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

A. Compete directly with banks in selling mortgaged to would-be home owners B. Offer loans directly to the consumer C. Buy mortgage-backed loans for banks and keep them all on their books, using them as collateral for the US government to borrow D. Repackage mortgage loans made by banks and sell them on to investors as asset backed securities

Correct Answer: D

Question 8

Which of the following was the key contributory risk factor to the problems at LTCM in the summer of 1998?
I. Model Risk
II. Lack of Transparency
III. Breakdown of Historical Correlations
IV. Over Regulation by Federal Regulators

A. I and III only B. III only C. All of these were key elements of the problems at LTCM D. III and IV only

Correct Answer: B

Question 9

According to LTCM managers:

A. Stress Testing was not conducted B. Stress Testing looked at the 12 biggest deals with each of their top 20 counterparties C. Stress Testing was not necessary because their trades were hedged D. Stress Testing was elaborate, complex and conducted on their entire portfolio. It included the assumptions of a major breakdown in historical correlations

Correct Answer: B

PRMIA Exam IV: Case Studies: Standards: Governance, Best Practices and Ethics - 2015 Edition - 8009 Exam Practice Test