Most Recent PRMIA 8004 Exam Questions & Answers

Prepare for the PRMIA Case Studies; Standards: Governance, Best Practices and Ethics exam with our extensive collection of questions and answers. These practice Q&A are updated according to the latest syllabus, providing you with the tools needed to review and test your knowledge.

QA4Exam focus on the latest syllabus and exam objectives, our practice Q&A are designed to help you identify key topics and solidify your understanding. By focusing on the core curriculum, These Questions & Answers helps you cover all the essential topics, ensuring you're well-prepared for every section of the exam. Each question comes with a detailed explanation, offering valuable insights and helping you to learn from your mistakes. Whether you're looking to assess your progress or dive deeper into complex topics, our updated Q&A will provide the support you need to confidently approach the PRMIA 8004 exam and achieve success.

The questions for 8004 were last updated on Nov 21, 2024.

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Question No. 1

When local rules and regulations conflict with the PRMIA Standards of Best Practice, Conduct and Ethics the PRMIA member should ...

ASeek advice from a qualified party, being mindful of legal and confidentiality requirements

BModify the interpretation of local rules and regulations to meet the situation

CIgnore local rules and regulations

DRespect local rules and regulations

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Correct Answer: A

Question No. 2

Which of the following was not received by Northern Rock as official support from the UK banking and government authorities?

AA covert money market support operation designed to cover up the difficulties Northern Rock was facing

BThe Bank of England's role as Lender-Of-Last-resort was activated at a penalty interest rate of 150 basis points above the Bank Rate

CThe UK government offered to guarantee all existing and new retail deposits, and to most other creditors

DThe Bank of England provided an additional unlimited facility secured on the collateral of all Northern Rock assets

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Correct Answer: A

Question No. 3

According to the Northern Rock Case Study, what is Forced Insolvency?

AThe bank is insolvent in that the current value of its assets (measured at book value) is less than the value of its liabilities; thus even if the bank were to liquidate all of its assets it would not be able to repay all depositors and other creditors

BThe bank is legally solvent but if, because it cannot fund its operations, it is forced to liquidate assets it could do so only at less than nominal values (fire sale) and this would make it legally insolvent (value of assets falls below those of liabilities)

CThe bank is legally solvent but its current funding costs (which are likely to continue) exceed the average rate of return on its assets and hence it would soon become insolvent as it would be making losses and would eventually exhaust its equity capital

DThe bank is solvent in that the current value of its assets (measured at book value) is more than the value of its liabilities; so even if the bank were to liquidate all of its assets it would be able to repay all depositors and other creditors

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Correct Answer: B

Question No. 4

Which of the following was not considered to be a positive outcome of the Northern Rock Case Study?

AThe role of the UK government and the possible underwriting of risks by tax-payers, and the general question of Moral Hazard

BThe reform of the Deposit Protection Scheme because of its internal inconsistencies

CIt emphasised the importance of effective governance arrangements within financial firms

DThe original successful business model had not stress tested sufficiently for the incidence of Low Probability, High Impact incidents

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Correct Answer: D

Question No. 5

A risk manager has just completed a risk assessment project. The report has been given to the risk manager's direct supervisor, who refuses to escalate the material issues raised in the report. Further, the direct supervisor edits the report to remove the section describing the material risk, who then submits it to the firm's Executive Committee.

According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), which of the following actions is most appropriate:

AThe risk manager has submitted the report to their direct supervisor and their obligation ends at this point, nothing further should be done

BThe risk manager should attempt to resolve the conflict with the direct supervisor, but if that does not work, they should contact the Whistle-Blowing Hotline of the organization. If no such hot-line is in place, they should contact the PRMIA Ethics Committee

CEscalation of the issue is against the Code of Conduct because one should respect the administrative structure of the organization

DIf the risk manager deems it appropriate, he / she should send a copy of the original report to the CEO

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Correct Answer: B

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