Question No. 1

Corporate Governance ...

AEliminates risk to the greatest extent possible

BIs defined as the assembled knowledge and wisdom of the collective stakeholders in the organization, set to maximize shareholder value

CIs defined as business decision making predicated on a belief in potential rewards, balanced with the knowledge, understanding and appreciation of the risk taken to pursue those potential rewards

DIs defined as that which is best practiced within an enterprise risk management framework, guided by the PRMIA Standards of Best Practice, Conduct and Ethics above all else

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Correct Answer: C

Question No. 2

A PRMIA member is offered a highly paid work assignment on the condition that some aspects of assignment are not to be done according to PRMIA standards.

What should they do?

APerform the assignment, noting in the final report the standards to which the assignment was done

BAccept the assignment, produce and deliver two reports according to both standards

CAccept the assignment, and prior to doing any work, report the conflict of interest to the organization's compliance department

DThe PRMIA member should place the integrity of the risk management profession and users of risk management above their own personal interests, and refuse the work

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Correct Answer: D

Question No. 3

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

AOffer loans directly to the consumer

BCompete directly with banks in selling mortgaged to would-be home owners

CRepackage mortgage loans made by banks and sell them on to investors as asset backed securities

DBuy mortgage-backed loans for banks and keep them all on their books, using them as collateral for the US government to borrow

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Correct Answer: C

Question No. 4

According to the PwC report China Aviation Oil, in order to avoid recording and reporting losses, the company adopted which approach covering up its losses?

Aselling short-term options with extremely low-risk profiles to generate premiums to cover the cost of closing out loss-making option positions

Bselling long-term options with extremely low-risk profiles to generate premiums to cover the cost of closing out loss-making option positions

Cselling short-term options with extremely high-risk profiles to generate premiums to cover the cost of closing out loss-making option positions

Dselling long-term options with extremely high-risk profiles to generate premiums to cover the cost of closing out loss-making option positions

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Correct Answer: D

Question No. 5

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

AI, II, III, and IV

BIV, III, II, and I

CII, I, IV, and III

DIII, II, IV, and I

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Correct Answer: B

Free PRMIA 8004 Exam Actual Questions

The questions for 8004 were last updated On Nov 7, 2024