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PRMIA 8004 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: PRMIA Standards of Best Practice, Conduct and Ethics | 30% | - Ethical decision-making framework - Professional integrity and accountability - Compliance with laws and regulations - Code of professional conduct |
| Topic 2: PRMIA Case Studies | 50% | - Application of risk principles to scenarios - Root cause identification - Historical risk failure analysis - Risk management lessons learned |
| Topic 3: PRMIA Principles of Good Governance | 20% | - Risk appetite and accountability - Risk governance frameworks - Transparency and disclosure - Board and senior management responsibilities |
PRMIA PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Sample Questions:
Question 1
Unlike the case at Barings Bank, National Australia Bank:
A. Was not dealing in derivatives
B. Had a risk management infrastructure that was credited with doing its' job well, despite the losses
C. Had a separation of duties between trading and back office
D. Had a Board of Directors that was unaware of the true nature of trading activities
Question 2
Which of the following is NOT part of the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct) Guidance on Ethical Behavior?
A. Respect local customs
B. Ensure globally accepted standards are adhered to at all costs
C. Respect local laws and regulations
D. Take responsibility for your work
Question 3
Bankgesellschaft Berlin's failures can be best characterised as
A. credit risk caused by a diversified portfolio of poor-quality loans
B. both A and B
C. credit risk caused by overexposure to the property market
D. none of the above
Question 4
Which of the following should NOT be part of the Risk Management Infrastructure?
A. Be independently staffed and report to an employee who is on the Executive Committee (Operating Committee) but who is NOT a business unit leader
B. Include financial risk management, compliance and external reporting and, to the extent that resources allow, should exclude legal or accounting
C. Define the organization's definition of risk management as articulated by the Board in clear and uncertain terms
D. Review continually the application of the Principles of Good Governance to the Risk Management Infrastructure, financial accounting and reporting infrastructure and the organization as a whole
Question 5
A risk manager is asked to analyze the credit risk of a convertible bond. The risk manager has never analyzed convertible bonds, but does have significant expertise in credit risk. The risk manager accepts the assignment, finds a paper on the subject through the PRMIA web site and copies the method used there. The risk manager completes the assignment and delivers a report to his or her direct supervisor and the supervisor is quite pleased.
According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), this was acceptable behavior if the following conditions were met:
I The risk manager disclosed the lack of knowledge about convertible bonds II The methodology employed is disclosed and explained III The report was just to be used for analysis and not in practice IV The risk manager was sure of his/her understanding of the paper found on the web
A. I only
B. I and II
C. I, II and IV
D. I, II and III
Solutions:
| Question 1 Answer: C | Question 2 Answer: B | Question 3 Answer: C | Question 4 Answer: D | Question 5 Answer: B |



