PRMIA 8008 : PRM Certification - Exam III: Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP - 2015 Edition

  • Exam Code: 8008
  • Exam Name: PRM Certification - Exam III: Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP - 2015 Edition
  • Updated: Oct 22, 2026
  • Q & A: 359 Questions and Answers

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PRMIA 8008 Exam Syllabus Topics:

SectionObjectives
Funds Transfer Pricing (FTP)- Internal pricing of funds and liquidity allocation
- FTP methodologies
Market Risk- Market risk measurement techniques
  • 1. Value at Risk (VaR)
    • 2. Stress testing and scenario analysis
      - Interest rate, equity, FX, and commodity risk
      Counterparty Risk- Netting and collateral management
      - Counterparty credit exposure
      - Derivatives credit risk considerations
      Credit Risk- Credit portfolio risk
      - Credit risk measurement and modeling
      • 1. Probability of default (PD)
        • 2. Exposure at default (EAD)
          • 3. Loss given default (LGD)
            Operational Risk- Operational risk management techniques
            • 1. Risk and control self-assessment (RCSA)
              • 2. Loss event data collection
                • 3. Key risk indicators (KRI)
                  - Operational risk types and sources
                  Risk Management Frameworks- Enterprise risk management principles
                  • 1. Risk appetite and tolerance
                    • 2. Risk governance structure
                      • 3. Risk identification and assessment processes
                        - Risk measurement and reporting frameworks
                        Asset-Liability Management (ALM)- Interest rate risk in the banking book (IRRBB)
                        - Liquidity risk management

                        PRMIA PRM Certification - Exam III: Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP - 2015 Edition Sample Questions:

                        Question #1

                        The Options Theoretic approach to calculating economic capital considers the value of capital as being equivalent to a call option with a strike price equal to:

                        • A. The value of the assets
                        • B. The notional value of the debt
                        • C. The value of the firm
                        • D. The market value of the debt
                        Reveal Solution  Discussion  0

                        Correct Answer: B  🗳️

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                        Question #2

                        The principle underlying the contingent claims approach to measuring credit risk equates the cost of eliminating credit risk for a firm to be equal to:

                        • A. the cost of a call on the firm's assets with a strike equal to the value of the debt
                        • B. the probability of the firm's assets falling below the critical value for default
                        • C. the market valuation of the firm's equity less the value of its liabilities
                        • D. the value of a put on the firm's assets with a strike equal to the value of the debt
                        Reveal Solution  Discussion  0

                        Correct Answer: D  🗳️

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                        Question #3

                        If the 99% VaR of a portfolio is $82,000, what is the value of a single standard deviation move in the portfolio?

                        • A. 50000
                        • B. 35248
                        • C. 134480
                        • D. 82000
                        Reveal Solution  Discussion  0

                        Correct Answer: B  🗳️

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                        Question #4

                        Which of the following correctly describes a reverse stress test:

                        • A. Stress tests that are prescribed and conducted by a regulator in addition to the tests done by a bank
                        • B. Stress tests that start from a known stress test outcome and then ask what events could lead to such an outcome for the bank
                        • C. A stress test that considers only qualitative factors that go beyond mathematical modeling to examine feedback loops and the effect of macro-economic fundamentals
                        • D. A stress test that requires a role reversal between risk managers and the risk taking business units in order to determine credible scenarios
                        Reveal Solution  Discussion  0

                        Correct Answer: B  🗳️

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                        Question #5

                        The probability of default of a security over a 1 year period is 3%. What is the probability that it would not have defaulted at the end of four years from now?

                        • A. 12.00%
                        • B. 11.47%
                        • C. 88.53%
                        • D. 88.00%
                        Reveal Solution  Discussion  0

                        Correct Answer: C  🗳️

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