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PRMIA 8004 Practice Test Questions Answers

Exam Code: 8004 (Updated 110 Q&As)
Exam Name: PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics
Last Update: 15-Sep-2025
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  • Single Choice: 110 Q&A's

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    8004 Questions and Answers

    Question # 1

    The problems which initiated the crisis at Northern Rock during the summer of 2007 were:

    A.

    Large customer withdrawals despite the UK regulator and the UK Treasury giving assurances that the bank was solvent

    B.

    Doubts arising about the viability of the business model which necessitated Bank of England intervention

    C.

    A general lack of confidence in mortgage backed securities associated in large part with developments in the US sub-prime mortgage market, and doubts emerging about the viability of the Northern Rock business model

    D.

    A depositor run on the bank, following doubts about the viability of the Northern Rock business model

    Question # 2

    Which of the following best characterize the problems that developed at Bankers Trust?

    A.

    Volume growth at the expense of margin

    B.

    Excessive reliance on volatile and sophisticated derivatives

    C.

    A failure to try to protect their clients' interests

    D.

    Over exposure to the property market

    Question # 3

    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 combined and therefore did increase risk.

    D.

    Proprietary and agency trading were separate and did increase risk.

    Question # 4

    Which of the following is part of the Group of 30 Report's market risk and stress testing recommendations?

    A.

    To be consistent with regulatory capital measures, 10-day holding periods should be standardized for VaR reporting

    B.

    Historic simulations are not effective methods of stress testing

    C.

    Stress tests should incorporate changes in liquidity

    D.

    Market risk VaR measures should be multiplied by 3 to get to a stress test figure, as long as the VaR model has been back-tested

    Question # 5

    How much of Washington Mutual's assets were funded by customer deposits for the decade ending in 2006?

    A.

    30%

    B.

    40%

    C.

    50%

    D.

    60%

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