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PRMIA 8010 Exam - Topic 1 Question 12 Discussion

A risk management function is best organized as:
B) report independently of the risk taking functions
A) integrated with the risk taking functions as risk management should be a pervasive activity carried out at all levels of the organization.
C) reporting directly to the traders, as to be closest to the point at which risks are being taken
D) a part of the trading desks and other risk taking teams

PRMIA 8010 Exam - Topic 1 Question 12 Discussion

Actual exam question for PRMIA's 8010 exam
Question #: 12
Topic #: 1
[All 8010 Questions]

A risk management function is best organized as:

Show Suggested Answer Hide Answer
Suggested Answer: B

The point that this question is trying to emphasize is the independence of the risk management function. The risk function should be segregated from the risk taking functions as to maintain independence and objectivity.

Choice 'd', Choice 'c' and Choice 'a' run contrary to this requirement of independence, and are therefore not correct. The risk function should report directly to senior levels, for example directly to the audit committee, and not be a part of the risk taking functions.


by Ozell at May 26, 2022, 12:25 PM

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Krissy
10 months ago
Surprised to see A getting so much love!
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Karrie
10 months ago
D? Really? That seems too close for comfort.
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Rosita
10 months ago
C sounds risky, but I see the logic.
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Florinda
10 months ago
I disagree, B makes more sense for objectivity.
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Kanisha
10 months ago
A is definitely the way to go! Risk should be everyone's job.
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Solange
11 months ago
I practiced a question similar to this, and I think D could be a possibility, but it seems risky to have them too close to the trading desks.
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Norah
11 months ago
I'm not entirely sure, but I feel like B makes sense since independence can help avoid conflicts of interest.
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Myra
11 months ago
I remember discussing how risk management should be integrated with risk-taking functions, so I think A might be the right choice.
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Santos
11 months ago
I have a vague memory of a case study that favored A, emphasizing that risk management needs to be pervasive throughout the organization.
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Ora
11 months ago
Hmm, the diagram doesn't give too many clues. I'm a bit unsure about this one, but I'll try to reason through the options.
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Johnathon
11 months ago
Okay, let's see. I think the first step is to identify the technology the application is built on, so I'll definitely choose option A. Then I'll need to verify the other key aspects like the interactions and match rules.
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Isabella
11 months ago
Configuring the WAF to filter requests from a specific IP address doesn't seem like the right approach here. I'll need to focus on the network and server configuration to resolve this issue.
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