TEST PRMIA 8011 SIMULATOR & HOT 8011 SPOT QUESTIONS

Test PRMIA 8011 Simulator & Hot 8011 Spot Questions

Test PRMIA 8011 Simulator & Hot 8011 Spot Questions

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Tags: Test 8011 Simulator, Hot 8011 Spot Questions, Test 8011 Online, 8011 Free Test Questions, Discount 8011 Code

Our company abides by the industry norm all the time. By virtue of the help from professional experts, who are conversant with the regular exam questions of our latest real dumps. The Credit and Counterparty Manager (CCRM) Certificate Exam exam dumps have summarized some types of questions in the qualification examination, so that users will not be confused when they take part in the exam, to have no emphatic answers. It can be said that the template of these questions can be completely applied. The user only needs to write out the routine and step points of the 8011 test material, so that we can get good results in the exams.

PRMIA 8011 (Credit and Counterparty Manager (CCRM) Certificate) Certification Exam is a globally recognized certification exam that tests the knowledge and skills necessary for credit risk management in the financial industry. 8011 exam is designed for professionals working in the areas of credit risk management, debt and capital markets, finance, and banking. The PRMIA 8011 CCRM Certificate is an accreditation that demonstrates an individual's ability to minimize the credit risk of a financial institution while maximizing the return on investment.

PRMIA 8011 exam covers a wide range of topics related to credit risk management, including credit analysis, credit policies, credit risk measurement, counterparty credit risk, and regulatory requirements. 8011 course aims to equip professionals with the analytical tools and techniques required to manage credit risk effectively. Credit and Counterparty Manager (CCRM) Certificate Exam certification is suitable for professionals in the banking, investment, and finance industries, as well as for those who are interested in pursuing a career in credit risk management.

PRMIA's CCRM certification is highly regarded in the financial industry and is recognized by a number of leading financial institutions around the world. Credit and Counterparty Manager (CCRM) Certificate Exam certification provides professionals with a competitive edge in the job market and demonstrates their commitment to excellence in credit and counterparty risk management.

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PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q186-Q191):

NEW QUESTION # 186
Which of the following statements are correct:
I. A training set is a set of data used to create a model, while a control set is a set of data is used to prove that the model actually works II. Cleansing, aggregating or ensuring data integrity is a task for the IT department, and is not a risk manager's responsibility III. Lack of information on the quality of underlying securities and assets was a major cause of the collapse in the CDO markets during the credit crisis that started in 2007 IV. The problem of lack of historical data can be addressed reasonably satisfactorily by using analytical approaches

  • A. I and III
  • B. II and IV
  • C. All of the above
  • D. I, III and IV

Answer: A

Explanation:
Statement I is correct. Data is often divided into two sets - a 'training set' that is used to create and fine-tune the model while the 'control set' is used to prove that the model works on sample data. Back testing is then perfomed using actual data that becomes available over time, or may already be available as historical data.
Statement II is incorrect. A risk manager often spends a great deal of time in managing data, and ensuring that the data being used is accurate enough for the purpose it is being used for. A risk manager can expect to spend a good part of his or her team's time in cleansing data. While he or she can try to get the IT processes and systems to produce correct data in the first place so it requires minimal subsequent cleansing or validation, this task is likely to remain a key part of a risk manager's role for quite some time in the future given the challenges nearly all organizations face in managing risk data.
Statement III is correct. There was not enough granular data available on the underlying components of some of the derivative debt securities whose markets dried up during the crisis that began in 2007. This was because investors became increasingly unsure of what the value of these securities, such as CDOs was, leading to market seizure and firesale prices.
Statement IV is not correct. There is no easy solution to the lack of enough historical data, which is used to create as well as test models, and construct stress scenarios. Analytical approaches are not a good enough substitute for real market data. During the recent crisis, many instruments had rather short histories and there was not enough data available, and risk managers and portfolio managers relied upon analytical approaches to value and price them. Many of the assumptions that underpinned these approaches were untested in the real world and turned out to be incorrect.
Therefore Choice 'c' is the correct answer and the rest are incorrect.


NEW QUESTION # 187
Which of the following need to be assumed to convert a transition probability matrix for a given time period to the transition probability matrix for another length of time:
I. Time invariance
II. Markov property
III. Normal distribution
IV. Zero skewness

  • A. III and IV
  • B. II and III
  • C. I, II and IV
  • D. I and II

Answer: D

Explanation:
Time invariance refers to all time intervals being similar and identical, regardless of the effects of business cycles or other external events. The Markov property is the assumption that there is no ratings momentum, and that transition probabilities are dependent only upon where the rating currently is and where it is going to.
Where it has come from, or what the past changes in ratings have been, have no effect on the transition probabilities.
Rating agencies generally provide transition probability matrices for a given period of time, say a year. The risk analyst may need to convert these into matrices for say 6 months, 2 years or whatever time horizon he or she is interested in. Simplifying assumptions that allow him to do so using simple matrix multiplication include these two assumptions - time invariance and the Markov property. Thus Choice 'c' is the correct answer. The other choices (normal distribution and zero skewness) are non-sensical in this context.


NEW QUESTION # 188
Under the internal ratings based approach for risk weighted assets, for which of the following parameters must each institution make internal estimates (as opposed to relying upon values determined by a national supervisor):

  • A. Exposure at default
  • B. Effective maturity
  • C. Probability of default
  • D. Loss given default

Answer: C


NEW QUESTION # 189
Which of the following statements is true in relation to collateral management?
I. A collateral management system need not consider the failure by counterparties to returncollateral when due II. The extent to which counterparties may have rehypothecated collateral is not a consideration for a collateral management system III. Cash is an acceptable substitute for any type of collateral required to be posted IV. Haircuts do not apply to treasury issued instruments posted as collateral

  • A. None of the statements is true
  • B. II and III
  • C. I, II and III
  • D. I, II, III and IV

Answer: A

Explanation:
Strong management of collateral, both receivable and payable, is emerging as an area requiring significant investment by financial institutions and asset managers in IT infrastructures and business processes. A bank needs to make collateral calls daily, based upon the P&L of the previous day, and likewise receives collateral calls from its counterparties. Just like cash, a bank needs to make sure that it does not run out of collateral to post when a call is received. Interestingly, based upon the agreements between banks and their mutual understanding, only certain types of instruments often qualify as valid collateral - and in such cases even cash is not acceptable if the right type of bond or other agreed security is not available to post. The operational challenges of managing collateral increase manifold due to 'rehypothecation', ie when collateral received from one counterparty gets posted out as collateral where it is due. In such cases, the bank should have the mechanisms to receive the right assets back in a timely way in case rehypothecated assets are to be returned.
The systems should be able to deal with delays, failures without impacting the ability of the bank to post collateral as needed. All of this requires major investments in IT and processes.
Statement I is not true as a bank is bound to post collateral to third parties when needed regardless of the failure of its counterparties to post collateral to it when owed. In the markets, failures by counterparties can and do happen, and a collateral management system needs to account for and keep a buffer for the fact that some collateral when due will not be received.
Statement II is not true as rehypothecation by counterparties of collateral posted increases the chances of the collateral not being received in time. The system should consider the need for liquidity to generate assets that can be posted as collateral when others have failed to return the collateral in a timely way.
Statement III is not correct as cash may not be acceptable to counterparties as collateral. From a practical point of view, they may not have the infrastructure to receive and account for cash as collateral. A Swiss bank, for example, may have an 'account' to receive US t-bills as collateral but may not even have a US dollar account to receive cash. Even if it did, the volumes of transactions going back and forth may make tracking and reconciliations impossible. Thus a bank should always make sure that it has the right type of collateral available to post.
Statement IV is incorrect as well, as treasury issued instruments are also subject to haircuts. Their value also fluctuates in response to changes in yields, and therefore they are subject to haircuts as well.
Thus none of the statements are correct and Choice 'd' is the correct answer.


NEW QUESTION # 190
The capital adequacy ratio applied to risk weighted assets for the calculation of capital requirements for credit risk per Basel II is:

  • A. 100%
  • B. 8%
  • C. 12.5%
  • D. 150%

Answer: B

Explanation:
The capital adequacy ratio, also called the minimum capital requirement for credit risk per Basel II is 8% of risk weighted assets. The other choices are incorrect.


NEW QUESTION # 191
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