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PRMIA Exam 8010 Topic 1 Question 69 Discussion

Actual exam question for PRMIA's 8010 exam
Question #: 69
Topic #: 1
[All 8010 Questions]

For credit risk calculations, correlation between the asset values of two issuers is often proxied with:

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Suggested Answer: D

Choice 'b', Choice 'c' and Choice 'a' correctly describe a bilateral close out netting as recommended by the ISDA. However Choice 'd' is not correct as it suggests individual settlement of transactions without netting which is the whole point of bilateral close out netting.


by Anastacia at Mar 20, 2025, 08:15 PM

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Lachelle
2 months ago
This is a classic case of 'the more you know, the more you realize you don't know'. I'm going with D) Default correlations, but I'm open to being corrected if I'm missing something!
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Fausto
2 months ago
Haha, if only the answer was 'E) Horoscope correlations' - that would really spice things up! But seriously, I agree that D) Default correlations is the way to go here.
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Micaela
2 months ago
I was debating between C) Equity correlations and D) Default correlations, but I ultimately went with D. Seems like the more direct approach for this kind of analysis.
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Ines
1 months ago
Default correlations are often used in credit risk calculations because they directly measure the relationship between defaults of two issuers.
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Anissa
1 months ago
I went with A) Credit migration matrices. It's another common approach to proxy correlation between asset values.
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Karma
2 months ago
I chose D) Default correlations as well. It's a common proxy for correlation in credit risk calculations.
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Avery
3 months ago
I think the correct answer is D) Default correlations. That makes the most sense for credit risk calculations.
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Sharee
1 months ago
Credit migration matrices are important for assessing credit risk as well.
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Chantell
2 months ago
Transition probabilities could also be a good proxy for correlation between asset values.
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Micah
2 months ago
I agree, default correlations are commonly used in credit risk calculations.
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Elizabeth
3 months ago
I'm not sure, but I think it could also be A) Credit migration matrices. It's important to consider the movement of credit ratings.
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Bulah
3 months ago
I agree with Deonna. Default correlations make sense for credit risk calculations.
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Deonna
3 months ago
I think the answer is D) Default correlations.
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