PRMIA 8010 Exam - Topic 1 Question 17 Discussion

Actual exam question for PRMIA's 8010 exam

Question #: 17
Topic #: 1

[All 8010 Questions]

Which of the following measures can be used to reduce settlement risks:

Aescrow arrangements using a central clearing house

Bincreasing the timing differences between the two legs of the transaction

Cproviding for physical delivery instead of netted cash settlements

Dall of the above

Show Suggested Answer

Suggested Answer: C

increasing the timing differences between the two legs of the transaction will increase settlement risk and not reduce it. Using escrow arrangements, such as central clearing houses to settle transactions (eg the DTCC in the United States) reduces settlement risk. Cash settlements based on netting arrangements reduce settlement risk, while physical delivery combined with gross cash payments increase it.

Therefore Choice 'a' is the correct answer.

by Golda at Aug 19, 2022, 07:44 PM

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Detra

4 months ago

Wait, are we sure all these options actually reduce risks?

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Brendan

4 months ago

All of the above seems like the safest bet!

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Anissa

4 months ago

Physical delivery can definitely help, but is it always practical?

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Lea

5 months ago

I disagree, increasing timing differences just complicates things.

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Britt

5 months ago

Escrow arrangements are a solid way to reduce risks!

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Mariann

5 months ago

I feel like "all of the above" could be the right answer since each option seems to address different aspects of settlement risk.

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Leatha

5 months ago

I practiced a similar question where physical delivery was mentioned as a way to reduce risks. I wonder if that applies here too.

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Izetta

5 months ago

I think increasing timing differences could actually increase risks rather than reduce them, but I might be mixing it up with another concept.

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Rodolfo

5 months ago

I remember studying that escrow arrangements can help mitigate settlement risks, but I'm not entirely sure if they are the only solution.

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Val

5 months ago

A business activity model? I don't think that's the right answer. That's more focused on the high-level business processes, not the specific sequence of tasks. I'm leaning towards the swim-lane diagram as the best option.

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Rosalind

5 months ago

Watch out for legal terminology here. 'Offering' suggests the explicit intent to corrupt, which is key. I'm leaning strongly towards option A.

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Vallie

5 months ago

Hmm, this seems straightforward. I think the best option here is to create a view, since that will allow other users to easily access the combined customer and order data with the calculated columns.

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Irving

5 months ago

Wait, is encryption the same as decryption? I'm getting a little confused on the difference between those two. I better double-check my notes before answering this one.

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