Free Case Studies; Standards: Governance, Best Practices and Ethics – 2015 Edition Exam 8009 Exam Practice Test

The Chair, Vice Chair, Secretary and Treasurer of the PRMIA Board of Directors are elected by:

• All PRMIA Fellow Members
• The Regional Directors
• The Blue Ribbon Advisory Panel
• A two-thirds affirmative vote of all members

The problems at Bankgesellschaft Berlin can best be characterized as failures related to:

• Market Risk
• Credit Risk
• Operational Risk
• Both B and C

PRMIA is incorporated as:

• A for-profit corporation
• A non-profit corporation
• A charitable trust
• A non profit corporation with for profit subsidiaries

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 organizationII. PRMIA StandardsIII. Guidelines from the regulators in which the organization operatesIV. The laws of the country

• I, II, III, and IV
• IV, III, II, and I
• II, I, IV, and III
• III, II, IV, and I

Which of the following was NOT a factor in the WorldCom collapse?

• Failed corporate governance
• Accounting abuses
• Unfair pricing to customers
• Over stating actual sales

Which of the following was the key contributory risk factor to the problems at LTCM in the summer of 1998?I Model RiskII. Lack of TransparencyIII. Breakdown of Historical CorrelationsIV. Over Regulation by Federal Regulators

• I and III only
• III only
• III and IV only
• All of these were key elements of the problems at LTCM

Which of the following are PRMIA Governance Principles?I, Sufficiency of Key Resources and ProcessII. State of the Art Risk Management TechnologyIII. Ongoing Education and DiscernmentIV. Sufficiency of Key Competencies

• I, II and IV only
• I and II only
• I, III and IV only
• All of these are PRMIA Governance Principles

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

• Offer loans directly to the consumer
• Compete directly with banks in selling mortgaged to would-be home owners
• Repackage mortgage loans made by banks and sell them on to investors as asset backed securities
• Buy mortgage-backed loans for banks and keep them all on their books, using them as collateral for the US government to borrow

TMFI's internal procedures and management were

• fully aware of the uninsured risks Fortress Re were taking
• absolutely unaware of their uninsured liabilities
• aware that they had some uninsured liabilities but thought they had enough capital to withstand any uninsured losses
• None of the above

Corporate Governance ...

• Eliminates risk to the greatest extent possible
• Is defined as the assembled knowledge and wisdom of the collective stakeholders in the organization, set to maximize shareholder value
• Is 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
• Is 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