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| Section | Objectives |
|---|---|
| Governance, Standards and Regulatory Frameworks | - Risk governance principles in financial institutions - Regulatory expectations and compliance structures |
| Ethics and Professional Standards | - Industry codes of ethics and decision-making standards - Professional conduct and ethical responsibilities |
| Case Study Application | - Integrated risk assessment scenarios - Governance and ethics decision analysis |
| Best Practices in Risk Management | - Enterprise risk management frameworks - Operational and financial risk controls |
Question 1
Up until 2006, which of the following was not a primary driver for Washington Mutual's earning?
A. Complex derivative trades based on volatility indices.
B. Lending to consumers and small businesses.
C. The provision of fee based services to its customers.
D. Deposit taking activities which generated net interest income.
Question 2
The problems in the Orange County case can best be characterized as failures related to:
A. Operational and Regulatory Compliance Risk
B. All of the Above
C. Market Risk
D. Credit Risk
Question 3
As a PRMIA member, you have certain responsibilities. Among these are the requirement(s) to:
A. Vote in Board elections
B. All of the above
C. Attend at least one PRMIA chapter meeting per year
D. Adhere to the PRMIA Standards of Best Practice, Conduct and Ethics
Question 4
The early 2003 trading strategy of China Aviation oil was
A. to sell calls and buy puts
B. to buy calls and sell puts
C. to buy puts and sell calls
D. to sell puts and buy calls
Question 5
According to the Group of 30 Report, option contracts:
A. Create credit risk only for the buyer (due to default by the seller) provided the premium is due, and paid, at contract initiation
B. Create no credit risk, since the buyer need not exercise the option
C. Always generate credit risk to both counterparties
D. Usually create credit risk only for the seller (to default by the buyer)
Solutions:
| Question 1 Answer: A | Question 2 Answer: C | Question 3 Answer: D | Question 4 Answer: B | Question 5 Answer: A |
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