8011 VALID TEST PREPARATION - NEW 8011 TEST OBJECTIVES

8011 Valid Test Preparation - New 8011 Test Objectives

8011 Valid Test Preparation - New 8011 Test Objectives

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Tags: 8011 Valid Test Preparation, New 8011 Test Objectives, 8011 Exam Objectives Pdf, Examcollection 8011 Free Dumps, 8011 Exam Questions Pdf

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PRMIA 8011 Exam is a comprehensive test that covers a range of topics related to credit and counterparty risk management. 8011 exam assesses the candidates' knowledge and understanding of credit analysis, exposure measurement, credit risk mitigation, counterparty risk management, and regulatory compliance. 8011 exam consists of multiple-choice questions and is conducted online. The candidates who pass the exam are awarded the PRMIA CCRM certificate, which is a globally recognized credential that signifies their expertise in credit and counterparty risk management. Credit and Counterparty Manager (CCRM) Certificate Exam certification is valid for three years, after which the candidates are required to complete continuing education courses to maintain their certification.

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All three PRMIA 8011 exam dumps formats are ready for download. Just select the best PRMIA 8011 exam questions type and download it after paying an affordable 8011 exam questions charge and start preparation today. We offer you the most accurate 8011 Exam Answers that will be your key to pass the certification exam in your first try.

PRMIA 8011 Certification Exam is a highly specialized certification that is designed to provide professionals with the knowledge and skills needed to manage credit and counterparty risk effectively. It covers a range of topics related to credit and counterparty risk and is intended for professionals who work in the financial industry. Credit and Counterparty Manager (CCRM) Certificate Exam certification is highly valued in the financial industry and is recognized by many leading financial institutions around the world.

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q44-Q49):

NEW QUESTION # 44
There are two bonds in a portfolio, each with a market value of $50m. The probability of default of the two bonds over a one year horizon are 0.03 and 0.08 respectively. If the default correlation is zero, what is the one year expected loss on this portfolio?

  • A. $1.38m
  • B. $5.26m
  • C. $11m
  • D. $5.5m

Answer: D

Explanation:
The probabilities of default of the two bonds are independent (as indicated by a zero default correlation). The various possible states of the portfolio are as follows:
First bond defaults, and the second does not: Probability * Loss = 0.03*0.92 * $50m = $1.38m Second bond defaults, and the first does not: Probability * Loss = 0.97*0.08 * $50m = $3.88m Both bonds default: Probability * Loss = 0.03*0.08 * $100m = $0.24m Thus total expected loss on this portfolio = $5.5m. Since recovery rates are not provided, those should be assumed to be zero.
There is an easier way to solve this as well: default correlation does not affect expected losses, but their volatility. You can calculate the expected losses of the two bonds and add them up, ie, $50m*0.03 + $50m *0.
08 = $5.5m


NEW QUESTION # 45
There are two bonds in a portfolio, each with a market value of $50m. The probability of default of the two bonds are 0.03 and 0.08 respectively, over a one year horizon. If the default correlation is 25%, what is the one year expected loss on this portfolio?

  • A. $1.38m
  • B. $5.26m
  • C. $11m
  • D. $5.5mc

Answer: D

Explanation:
We will need to calculate the joint probability distribution of the portfolio as follows.Probability of the joint default of both A and B = A black line with numbers and symbols Description automatically generated with medium confidence

The marginal probabilities (ie the standalone probabilities of default of the two bonds) are known, and if we can calculate the probability of joint defaults of the two bonds, we can calculate the rest of the entries. We then multiply the probabilities with the expected loss under each scenario and add them up to get the total expected loss.
The calculations are shown below. The expected loss is $5.5m, and therefore the correct answer isChoice 'd'.
A screenshot of a paper Description automatically generated


NEW QUESTION # 46
A risk analyst attempting to model the tail of a loss distribution using EVT divides the available dataset into blocks of data, and picks the maximum of each block as a data point to consider.
Which approach is the risk analyst using?

  • A. Peak-over-thresholds approach
  • B. Block Maxima approach
  • C. Expected loss approach
  • D. Fourier transformation

Answer: B

Explanation:
The risk analyst is using the block maxima approach. The data points that result will then be used to fit a GEV distribution.
Expected shortfall refers to the expected losses beyond a specified threshold. The peaks-over-threshold approach is an alternative approach to the block maxima approach, and involves considering exceedances above a threshold. Fourier transformation is not relevant in this context, and is a non-sensical option.


NEW QUESTION # 47
Which of the following are elements of 'group risk':
I. Market risk
II. Intra-group exposures
III. Reputational contagion
IV. Complex group structures

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

Answer: D

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 # 48
Which of the following statements are true:
I. Credit risk and counterparty risk are synonymous
II. Counterparty risk is the contingent risk from a counterparty's default in derivative transactions III. Counterparty risk is the risk of a loan default or the risk from moneys lent directly IV. The exposure at default is difficult to estimate for credit risk as it depends upon market movements

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

Answer: D

Explanation:
Credit risk is the risk from a borrower defaulting on moneys lent. Counterparty risk, on the other hand, is the risk that a counterparty to a derivative transaction will be unable to pay at the time the transaction is in-the- money.
Credit risk therefore relates more to the banking book, counterparty risk relates more to the trading book.
Credit risk and counterparty risk differ in that for counterparty risk, the amount at risk fluctuates for counterparty risk depending upon the value of the underlying derivative. Counterparty risk generally starts at zero, for most swaps and other derivatives are near zero value at inception. Over time, as the prices of the underlying instruments move, one party ends up owing money to the other. A deterioration in the financial situation of the party owing moneys may lead to a loss to the other party, resulting in counterparty risk.
Counterparty risk can also arise from stock lending operations and repo trades.
Credit risk on the other hand is the traditional risk of default by a borrower, or a bank's customer who has taken a loan or has an overdraft or other credit facility.
Statement I is therefore incorrect as credit risk and counterparty risks are different.
Statement II is correct as counterparty risk is 'contingent' in the sense it arises only if the transaction with the counterparty ends up being in-the-money, and the counterparty defaults.
Statement III is incorrect. The statement describes credit risk.
Statement IV is incorrect, as the exposure is known for moneys lent. Derivative exposures for the future are difficult to estimate, they can even turn from moneys owed to moneys due as the value of the underlying changes.


NEW QUESTION # 49
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New 8011 Test Objectives: https://www.2pass4sure.com/PRMIA-Certification/8011-actual-exam-braindumps.html

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