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NEW QUESTION 61
A risk assessment report generated by a PRMIA member creates an apparent conflict of interest between the PRMIA standards and those of the client organization.
Of the following, which is the correct hierarchy to follow to resolve the conflict?
I. The decision of a superior within the organization
II. PRMIA Standards
III. Guidelines from the regulators in which the organization operates
IV. The laws of the country
- A. II, I, IV, and III
- B. III, II, IV, and I
- C. IV, III, II, and I
- D. I, II, III, and IV
Answer: C
NEW QUESTION 62
TMFI's internal procedures and management were
- A. fully aware of the uninsured risks Fortress Re were taking
- B. aware that they had some uninsured liabilities but thought they had enough capital to withstand any uninsured losses
- C. None of the above
- D. absolutely unaware of their uninsured liabilities
Answer: D
NEW QUESTION 63
For the sentence
"The organization shall encourage all employees to keep abreast of the latest developments in their particular areas of expertise, through ____________, _____________, and _____________ and shall make adequate resources available to enable this to occur," Choose the correct combinations of words from the following options:
- A. journals, courses, compliance mandates
- B. courses, educational certification, journals
- C. conferences, discussion groups, blog sites
- D. courses, conferences, journals
Answer: D
NEW QUESTION 64
Employees shall be remunerated adequately for the roles that they perform, where 'adequately' is defined
- A. using the risk reward profile for each business line in the organization
- B. using external references and benchmarks, and in a framework which is consistent with the type of risk-taking behavior expected of employees
- C. as being the market norm for similarly situated personnel in competitive organizations
- D. as commensurate with policies to attract and retain high income / revenue earners
Answer: B
NEW QUESTION 65
The Basic Knowledge a PPRMIA member should comply with, as stipulated within the PRMIA Standards of Best Practice, Conduct & Ethics, is to
- A. only improve their PERSONAL professional competence
- B. learn from a qualified risk management practitioner
- C. maintains and improve their professional competence and strive to maintain and improve the competence of other risk professionals
- D. only possess the required skills and/or certification to complete the risk assessment / management work at hand
Answer: C
NEW QUESTION 66
John Smith wants to run for election to the Board of Directors of PRMIA. To be nominated, he needs:
- A. The backing of 6% of local members
- B. To go through a screening process conducted by the Nominations Committee
- C. The backing of three other members
- D. The backing of five other members and to be serving on at least one PRMIA Committee
Answer: C
NEW QUESTION 67
The problems in the Orange County case can best be characterized as failures related to:
- A. All of the Above
- B. Market Risk
- C. Credit Risk
- D. Operational and Regulatory Compliance Risk
Answer: B
NEW QUESTION 68
Unlike the case at Barings Bank, National Australia Bank:
- A. Had a separation of duties between trading and back office
- B. Had a risk management infrastructure that was credited with doing its' job well, despite the losses
- C. Was not dealing in derivatives
- D. Had a Board of Directors that was unaware of the true nature of trading activities
Answer: A
NEW QUESTION 69
Taisei Fire and Marine Insurance Co
- A. had a full understanding from other members of the pool of the pool's liabilities
- B. relied on the information it received from other members of the reinsurance pool to manage its risks
- C. had a full understanding from Fortress Re of the risks in the pool
- D. relied almost entirely on Fortress Re's management team for information on the risks in its portfolio
Answer: D
NEW QUESTION 70
Several clients, including Procter and Gamble took legal action against Bankers Trust, claiming Bankers Trust
- A. did not honour its contractual obligations to pay
- B. sold them derivative products without properly advising them of the relevant risks
- C. hid profits
- D. was involved in accounting fraud
Answer: B
NEW QUESTION 71
PwC concluded that the accounting policy adopted by China Aviation Oil was incorrect because it
- A. only took into account the time value of the option (which includes recognizing the time left to maturity of the option, the volatility of the spot price of the underlying commodity, interest rates and other factors)
- B. used neither the intrinsic value nor the time value
- C. took into account both the intrinsic value and the time value
- D. only regarded the intrinsic value (i.e. the difference between the strike price and the forward price of the underlying commodity) as the fair value of its options
Answer: D
NEW QUESTION 72
The early 2003 trading strategy of China Aviation oil was
- A. to buy calls and sell puts
- B. to buy puts and sell calls
- C. to sell puts and buy calls
- D. to sell calls and buy puts
Answer: A
NEW QUESTION 73
Which of the following should NOT be part of the Risk Management Infrastructure?
- A. Include financial risk management, compliance and external reporting and, to the extent that resources allow, should exclude legal or accounting
- B. Be independently staffed and report to an employee who is on the Executive Committee (Operating Committee) but who is NOT a business unit leader
- C. Review continually the application of the Principles of Good Governance to the Risk Management Infrastructure, financial accounting and reporting infrastructure and the organization as a whole
- D. Define the organization's definition of risk management as articulated by the Board in clear and uncertain terms
Answer: C
NEW QUESTION 74
Select the one correct statement relative to Barings Bank.
- A. Proprietary and agency trading were combined and therefore did not increase risk.
- B. Proprietary and agency trading were separate and therefore did not increase risk.
- C. Proprietary and agency trading were separate and did increase risk.
- D. Proprietary and agency trading were combined and therefore did increase risk.
Answer: D
NEW QUESTION 75
What was the main type of risk that Metallgesellschaft was exposed to?
- A. Interest Rate
- B. Inflation
- C. Currency Settlement
- D. Basis Risk
Answer: D
NEW QUESTION 76
A risk manager finds that a client is engaged in a practice that looks like money laundering.
According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), the risk manager should:
- A. Report the findings immediately to authorities
- B. Report this conduct to their immediate supervisor
- C. Approach the client about the concern, regardless of what their reaction might be
- D. Respect the client's confidentiality as that takes precedence
Answer: B
NEW QUESTION 77
Mary Jones wants the Bylaws of PRMIA to be changed so that people can't join PRMIA unless they meet a set of criteria she has devised with her colleagues. She can do this by getting which of the following approvals:
- A. The Board of Directors, but only if the Blue Ribbon Panel affirms the change
- B. 34 of all Members
- C. The Board of Directors and a majority of the Members
- D. The Board of Directors alone
Answer: C
NEW QUESTION 78
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Exam IV: Case Studies: Standards: Governance, Best Practices and Ethics - 2015 Edition Certification Sample Questions and Practice Exam: https://www.examslabs.com/PRMIA/PRM/best-8009-exam-dumps.html