PRMIA 8010 Exam - Topic 3 Question 84 Discussion

Actual exam question for PRMIA's 8010 exam

Question #: 84
Topic #: 3

Which of the following statements is true:

1. Basel II requires banks to conduct stress testing in respect of their credit exposures in addition to stress testing for market risk exposures

2. Basel II requires pooled probabilities of default (and not individual PDs for each exposure) to be used for credit risk capital calculations

B2 & 2

DNeither statement is true

Show Suggested Answer

Suggested Answer: B

The correct answer is choice 'b'

Both statements are accurate. Basel II requires pooled probabilities of default to be applied to risk buckets that contain similar exposures. Also, stress testing is mandatory for both market and credit risk.

by Amie at Apr 07, 2026, 11:30 PM

Limited Time Offer

25%

Off

Get Premium 8010 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Cletus

14 days ago

I agree, Basel II definitely covers credit exposure stress testing!

upvoted 0 times

...

Elvera

19 days ago

Statement 1 is true, banks do stress testing for credit risks.

upvoted 0 times

...

Ellsworth

1 month ago

I have a feeling that neither statement is true, but I can't quite recall the details from my studies.

upvoted 0 times

...

Stevie

1 month ago

I practiced a similar question, and I recall that stress testing is indeed required, but I can't remember if it's specifically for credit exposures too.

upvoted 0 times

...

Ming

1 month ago

I'm not entirely sure, but I feel like Basel II does focus on pooled probabilities of default for capital calculations, so maybe statement 2 is correct?

upvoted 0 times

...

Adolph

2 months ago

I think statement 1 might be true because I remember something about stress testing being important for both credit and market risks under Basel II.

upvoted 0 times

...