PRMIA Exam 8008 Topic 1 Question 22 Discussion

Actual exam question for PRMIA's Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP ? 2015 Edition exam

Question #: 22
Topic #: 1

[All Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP ? 2015 Edition Questions]

Which of the following risks were not covered in detail in most stress tests prior to the current crisis:

I,The behavior of complex structured products under stressed liquidity conditions

II,Pipeline or securitization risk

III,Basis risk in relation to hedging strategies

IV. Counterparty credit risk

V, Contingent risks

VI,Funding liquidity risk

AI, IV and VI

BI, II, III, IV and VI

CII, III and V

DAll of the above

Show Suggested Answer

Suggested Answer: D

The BCBS publication 'Principles for sound stress testing practices and supervision' (May 2009) identifies all of the above as risks that were covered in insufficient detail in most stress tests prior to the current crisis. Therefore Choice 'd' is the correct answer.

For the PRM exam, you should have read this document. You should also be familiar with all the above risk types as being contributors to the crisis, and know what each of these mean.

by Ceola at May 07, 2022, 04:41 AM

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