PRMIA 8010 Operational Risk Manager (ORM) Exam Exam Practice Test Questions

• Question 1

  Which of the following is not one of the 'three pillars' specified in the Basel accord:

  • Market discipline
  • Supervisory review
  • National regulation
  • Minimum capital requirements

  Show Answer Answer: C Next

• Question 2

  Which of the following statements are true:1. The three pillars under Basel II are market risk, credit risk and operational risk.2. Basel II is an improvement over Basel I by increasing the risk sensitivity of the minimum capital requirements.3. Basel II encourages disclosure of capital levels and risks

  • 3 only
  • 1 only
  • 1 and 2
  • 2 and 3

  Show Answer Answer: D Next

• Question 3

  Which of the following statements are true?1. Retail Risk Based Pricing involves using borrower specific data to arrive at both credit adjudication and pricing decisions2. An integrated 'Risk Information Management Environment' includes two elements - people and processes3. A Logical Data Model (LDM) lays down the relationships between data elements that an organization stores4. Reference Data and Metadata refer to the same thing

  • 2 and 4
  • 1 and 3
  • 1, 2 and 3
  • All of the above

  Show Answer Answer: B Next

• Question 4

  Which of the following is not a limitation of the univariate Gaussian model to capture the codependence structure between risk factros used for VaR calculations?

  • The univariate Gaussian model fails to fit to the empirical distributions of risk factors, notably their fat tails and skewness.
  • Determining the covariance matrix becomes an extremely difficult task as the number of risk factors increases.
  • It cannot capture linear relationships between risk factors.
  • A single covariance matrix is insufficient to describe the fine codependence structure among risk factors as non-linear dependencies or tail correlations are not captured.

  Show Answer Answer: C Next

• Question 5

  For a FX forward contract, what would be the worst time for a counterparty to default (in terms of the maximum likely credit exposure)

  • At maturity
  • Roughly three-quarters of the way towards maturity
  • Indeterminate from the given information
  • Right after inception

  Show Answer Answer: A Next