PRMIA Test 8011 Testking: Credit and Counterparty Manager (CCRM) Certificate Exam - PracticeMaterial High-effective Company

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PRMIA 8011 CCRM Certificate Exam is ideal for professionals in the financial industry, particularly those who work in credit risk management, counterparty risk management, portfolio management, asset management, and trading. 8011 exam is designed to test their knowledge of credit and counterparty risk management, as well as their ability to apply this knowledge to practical scenarios. By earning the PRMIA 8011 CCRM certificate, an individual demonstrates their proficiency in managing credit and counterparty risk and highlights their commitment to professional development and career advancement.

PRMIA 8011: Credit and Counterparty Manager (CCRM) Certificate Exam is an advanced certification program designed to enhance the knowledge and skills of professionals in credit and counterparty risk management. It offers a comprehensive understanding of credit risk management strategies, counterparty credit risk management practices, and credit risk analysis and assessment. Credit and Counterparty Manager (CCRM) Certificate Exam certification program is highly respected in the finance industry and is globally recognized. It provides an excellent opportunity for professionals to advance their careers and validate their expertise in credit risk management.

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PRMIA 8011 (Credit and Counterparty Manager (CCRM) Certificate) Exam is a globally recognized certification for professionals in the finance industry. Credit and Counterparty Manager (CCRM) Certificate Exam certification focuses on credit risk management, counterparty credit risk, and other aspects of credit management. 8011 course is designed to provide professionals with the knowledge and skills required to effectively manage credit risk in today's dynamic financial environment.

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q288-Q293):

NEW QUESTION # 288
Which of the following are elements of 'group risk':
I. Market risk
II. Intra-group exposures
III. Reputational contagion
IV. Complex group structures

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

Answer: C

Explanation:
The term 'group risk' has been defined in the FSA document 08/24 on stress testing as the risk that a firm may be adversely affected by an occurrence (financial or non-financial) in another group entity or an occurrence that affects ther group as a whole. These risks may occur through:
- reputational contagion,
- financial contagion,
- leveraging,
- double or multiple gearing,
- concentrations and large exposures (particularly intra-group).
Thus, the insurance sector may be considered a group, and a firm may suffer just because another group firm has had losses or reputational issues.
The FSA statement goes on to identify some elements of group risk as follows:
- intra-group exposures (credit or operational exposures through outsourcing or service arrangements, as well as more standard business exposures);
- concentration risks (from credit, market or insurance risks which could put a strain on capital resources across entities simultaneously);
- contagion (reputational damage, operational or financial pressures); and
- complex group structures (with dependencies, complex split of responsibilities and accountabilities).
Therefore Choice 'a' is the correct answer and the rest of the choices are incorrect.

NEW QUESTION # 289
An assumption of normality when returns data have fat tails leads to:
I. underestimation of VaR at high confidence levels
II. overestimation of VaR at low confidence levels
III. overestimation of VaR at high confidence levels
IV. underestimation of VaR at low confidence levels

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

Answer: D

Explanation:
When returns are non-normal and have fat tails, an assumption of normality in returns leads to underestimation of VaR at high confidence levels. At the same time, at lower confidence levels the normal distribution may give higher VaR estimates. Therefore Choice 'a' is correct. The other choices are incorrect.
Also refer to the tutorial about VaR and heavy tails.

NEW QUESTION # 290
The loss severity distribution for operational risk loss events is generally modeled by which of the following distributions:
I. the lognormal distribution
II. The gamma density function
III. Generalized hyperbolic distributions
IV. Lognormal mixtures

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

Answer: C

Explanation:
All of the distributions referred to in the question can be used to model the loss severity distribution for op risk. Therefore Choice 'c' is the correct answer.

NEW QUESTION # 291
If EV be the expected value of a firm's assets in a year, and DP be the 'default point' per the KMV approach to credit risk, and#be the standard deviation of future asset returns, then the distance-to-default is given by:

Answer: B

Explanation:
The distance to default is the number of standard deviations that expected asset values are away from the default point. The expression in Choice 'd' represents distance to default. Choice 'd' is the correct answer. The other choices are incorrect.

NEW QUESTION # 292
Which of the following statements is true:
I. Recovery rate assumptions can be easily made fairly accurately given past data available fromcredit rating agencies.
II. Recovery rate assumptions are difficult to make given the effect of the business cycle, nature of the industry and multiple other factors difficult to model.
III. The standard deviation of observed recovery rates is generally very high, making any estimate likely to differ significantly from realized recovery rates.
IV. Estimation errors for recovery rates are not a concern as they are not directionally biased and will cancel each other out over time.

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

Answer: B

Explanation:
Recovery rates vary a great deal from year to year, and are difficult to predict. Therefore statement III is true.
Similarly, any attempt to predict these is hamstrung by a high standard error, which can be as high as the historical mean itself. The error does not cancel itself out due to the effect of the business cycle making the error directionally biased. Thus statement IV is false.
Statement II is true as these are all factors that make forecasting recovery rates for any credit risk model rather difficult. Statement I is false because recovery rates are difficult to predict and assumptions are not easy to make.

NEW QUESTION # 293
......

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PRMIA TEST 8011 TESTKING: CREDIT AND COUNTERPARTY MANAGER (CCRM) CERTIFICATE EXAM - PRACTICEMATERIAL HIGH-EFFECTIVE COMPANY

PRMIA Test 8011 Testking: Credit and Counterparty Manager (CCRM) Certificate Exam - PracticeMaterial High-effective Company