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| Section | Weight | Objectives |
|---|---|---|
| Risk Management Case Studies | 25% | - Northern Rock - Orange County - Long-Term Capital Management (LTCM) - Metallgesellschaft - China Aviation Oil - Baring Bank |
| Risk Management Best Practices | 20% | - Internal Controls and Risk Limits - Compliance and Regulatory Alignment - Enterprise Risk Management Framework |
| PRMIA Standards of Best Practice, Conduct and Ethics | 30% | - Whistleblowing and Reporting Violations - Conflict of Interest and Disclosure - Ethical Decision-Making Framework - Code of Conduct and Professional Responsibilities |
| Corporate Governance Principles | 25% | - PRMIA Governance Principles - Transparency and Accountability - Risk Governance Structure - Board and Senior Management Oversight |
Question 1
The "Renewing the Dream" program signed into law by President George W Bush in 2002 was designed to
A. Recapitalise Fannie Mae and Freddie Mac with US$2.4 billion of additional capital to ensure they weathered the risks associated with any future downturn in the housing markets
B. Allow risky, high-cost loans to be credited towards affordable housing goals
C. Provide grants of US$800 million to help home buyers with down-payment and closing costs
D. Provide tax credits of nearly US$2.4 billion over the next 5 years to investors and builders who developed affordable single-family housing in poor and distressed areas
Question 2
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. none of the above
D. credit risk caused by overexposure to the property market
Question 3
According to the Group of 30 Report, deriving aggregate potential credit exposure for a counterparty by adding up the potential exposure of multiple transactions:
A. Overstates exposure in most cases
B. Can easily reflect the impact of netting
C. Gives an accurate result in most cases
D. Captures portfolio effects but not tenor differences
Question 4
The early 2003 trading strategy of China Aviation oil was
A. to buy puts and sell calls
B. to sell calls and buy puts
C. to buy calls and sell puts
D. to sell puts and buy calls
Question 5
How much of Washington Mutual's assets were funded by customer deposits for the decade ending in 2006?
A. 30%
B. 50%
C. 60%
D. 40%
Solutions:
| Question 1 Answer: D | Question 2 Answer: D | Question 3 Answer: A | Question 4 Answer: C | Question 5 Answer: C |
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