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PRMIA 8004 Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Standards & Practices | - Principles of Good Governance Principles, PRMIA - Group of Thirty Best Practices, Global Derivatives Study Group - Bylaws of Professional Risk Managers' International Association, PRMIA - Standards of Best Practice, Conduct and Ethics, PRMIA Ethics Committee |
| Case Studies | - Silicon Valley Bank - Metallgesellschaft - Bankers Trust - National Australia Bank (NAB) - FX Options - Barings - Lehman Brothers - Orange County - WorldCom - American Insurance Group (AIG) - Long Term Capital Management (LTCM) - Operational Resilience at TSB - Northern Rock - Washington Mutual (Wamu) - FTX - Fannie Mae and Freddie Mac |
PRMIA PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Sample Questions:
1. Which of the following is NOT part of the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct) Guidance on Ethical Behavior?
A) Ensure globally accepted standards are adhered to at all costs
B) Respect local laws and regulations
C) Take responsibility for your work
D) Respect local customs
2. Which of the following are PRMIA Governance Principles?
I Independence of Key Parties
II Disclosure and Transparency
III Internal Validation
IV Solvency
A) I, II and III only
B) I, II and IV only
C) I and II only
D) All are PRMIA Governance Principles
3. National Australia Bank and Barings cases are similar in that:
A) The back offices had inadequate procedures
B) Both A and B
C) None of the above
D) Losses kept increasing while rogue trader(s) hid their positions
4. Which of the following is FALSE?
A) Nick Leeson also ran the back office for his trading area
B) Nick Leeson dealt in complex derivatives lacking transparency of pricing
C) SIMEX made inquiries to Barings Bank about large margin calls on its positions
D) Nick Leeson claimed to be running an arbitrage book
5. Unlike the case at Barings Bank, National Australia Bank:
A) Had a risk management infrastructure that was credited with doing its' job well, despite the losses
B) Had a Board of Directors that was unaware of the true nature of trading activities
C) Was not dealing in derivatives
D) Had a separation of duties between trading and back office
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: C | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: D |



