PRMIA Exam 8010 Topic 1 Question 11 Discussion

Actual exam question for PRMIA's Operational Risk Manager (ORM) Exam exam

Question #: 11
Topic #: 1

[All Operational Risk Manager (ORM) Exam Questions]

Which of the following is not a tool available to financial institutions for managing credit risk:

ACollateral

BCumulative accuracy plot

CThird party guarantees

DCredit derivatives

Show Suggested Answer

Suggested Answer: B

Collateral, limits to avoid credit exposure concentrations, termination rights based upon credit ratings, third party guarantees and credit derivatives are all tools or instruments that financial institutions use to manage their credit risk. A cumulative accuracy plot measures the accuracy of ratings, and is not a tool for managing credit risk. Therefore Choice 'b' represents the correct answer.

by My at May 08, 2022, 12:50 AM

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