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PRMIA Exam 8010 Topic 1 Question 19 Discussion

Actual exam question for PRMIA's Operational Risk Manager (ORM) Exam exam
Question #: 19
Topic #: 1
[All Operational Risk Manager (ORM) Exam Questions]

Which of the following is not a credit event under ISDA definitions?

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Suggested Answer: C

According to ISDA, a credit event is an event linked to the deteriorating credit worthiness of an underlying reference entity in a credit derivative. The occurrence of a credit event usually triggers full or partial termination of the transaction and a payment from protection seller to protection buyer. Credit events include

- bankruptcy,

- failure to pay,

- restructuring,

- obligation acceleration,

- obligation default and

- repudiation/moratorium.

A rating downgrade is not a credit event.


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