PRMIA 8011 Exam | 8011 Pass Exam - Best Provider for 8011: Credit and Counterparty Manager (CCRM) Certificate Exam Exam
PRMIA 8011 Exam | 8011 Pass Exam - Best Provider for 8011: Credit and Counterparty Manager (CCRM) Certificate Exam Exam
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PRMIA 8011: Credit and Counterparty Manager (CCRM) Certificate exam is an excellent certification program for professionals who are interested in credit and counterparty risk management. It provides a comprehensive understanding of the principles and practices of credit risk management, as well as the various tools and techniques used to manage counterparty risk. Credit and Counterparty Manager (CCRM) Certificate Exam certification is recognized globally and is highly regarded in the financial services industry, making it an essential certification for professionals involved in credit and counterparty risk management.
PRMIA 8011 Exam comprises 80 multiple-choice questions and requires a minimum score of 60% to pass. 8011 exam is proctored and may be completed online or at a designated testing center. The questions cover a broad range of topics including credit risk measurement and management, counterparty credit risk, market risk, legal documentation, and regulatory requirements.
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PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q186-Q191):
NEW QUESTION # 186
Which of the following statements is true:
I. Confidence levels for economic capital calculations are driven by desired credit ratings II. Loss distributions for operational risk are affected more by the severity distribution than the frequency distribution III. The Advanced Measurement Approach (AMA) referred to in the Basel II standard is a type of a Loss Distribution Approach (LDA) IV. The loss distribution for operational risk under the LDA (Loss Distribution Approach) is estimated by separately estimating the frequency and severity distributions.
- A. III and IV
- B. I, II and IV
- C. I and II
- D. I, III and IV
Answer: B
Explanation:
Statement I is correct. Economic capital is the capital available to absorb unexpected losses, and credit ratings are also based upon a certain probability of default. Economic capital is oftencalculated at a level equal to the confidence required for the desired credit rating. For example, if the probability of default for a AA rating is
0.02%, then economic capital maintained at a 99.98% would allow for such a rating. Economic capital set at a
99.8% level can be thought of as the level of losses that would not be exceeded with a 99.8% probability.
Loss distributions are the product of the severity and frequency distributions, each of which are estimated separately. The total loss distribution is affected far more by the severity distribution than by the frequency distribution, therefore statement II is correct.
The Loss Distribution Approach (LDA) is one of the ways in which the requirements of the AMA can be satisfied, and not the other way round. Therefore statement III is incorrect.
Statement IV is correct as the total loss distribution is estimated using separate estimates of loss frequency and distributions.
NEW QUESTION # 187
If the annual variance for a portfolio is 0.0256, what is the daily volatility assuming there are 250 days in a year.
- A. 0.0006
- B. 0.0101
- C. 0.0016
- D. 0.4048
Answer: B
Explanation:
If annual variance is 0.0256, then annual volatility (ie standard deviation) is #0.0256. Therefore the daily volatility will be #0.0256/#250 = 1.01%. The other choices are not correct.
NEW QUESTION # 188
The degree distribution of the nodes of the financial network is:
- A. normally distributed
- B. non-linear
- C. long tailed
- D. best approximated by a beta distribution
Answer: C
Explanation:
The 'degree' of a node in a network measures the number of links to other nodes. For the financial network, each market participant can be thought of as a node. The 'degree distribution' can be thought of as the histogram of the number of links for each node.
The financial network has a degree distribution with rather long tails - and therefore Choice 'd' is the correct answer. The other choices are incorrect. Long tailed networks have the property that they are robust when affected by random disturbances, but susceptible to targeted attacks, for example on key hubs.
NEW QUESTION # 189
The returns for a stock have a monthly volatilty of 5%. Calculate the volatility of the stock over a two month period, assuming returns between months have an autocorrelation of 0.3.
- A. 10%
- B. 5%
- C. 7.071%
- D. 8.062%
Answer: D
Explanation:
The square root of time rule cannot be applied here because the returns across the periods are not independent.
(Recall that the square root of time rule requires returns to be iid, independent and identically distributed.) Here there is a 'autocorrelation' in play, which means one period's returns affect the returns of the other period.
This problem can be solved by combining the variance of the returns from the two consecutive periods in the same way as one would combine the variance of different assets that have a givencorrelation. In such cases we know that:
Variance (A + B) = Variance(A) + Variance(B) + 2*Correlation*StdDev(A)*StdDev(B).
The standard deviation can be calculated by taking the square root of the variance.
Therefore the combined volatility over the two months will be equal to =SQRT((5%