WILL DUMPSQUESTION 8011 PRACTICE QUESTIONS HELP YOU TO PASS THE CERTIFICATION EXAM?

Will DumpsQuestion 8011 Practice Questions help You to Pass the certification exam?

Will DumpsQuestion 8011 Practice Questions help You to Pass the certification exam?

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Tags: 8011 Certification Test Answers, 8011 Reliable Study Materials, 8011 Review Guide, New APP 8011 Simulations, 8011 Exam Assessment

Our company committed all versions of 8011 practice materials attached with free update service. When 8011 exam preparation has new updates, the customer services staff will send you the latest version. So we never stop the pace of offering the best services and 8011 practice materials for you. Tens of thousands of candidates have fostered learning abilities by using our 8011 Learning materials you can be one of them definitely.

PRMIA 8011 is an essential certification for anyone looking to advance in the field of risk management, particularly in credit risk and counterparty management. It offers professionals an opportunity to demonstrate their expertise and knowledge in key areas of credit and counterparty risk, and to differentiate themselves in a highly competitive industry.

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8011 Reliable Study Materials & 8011 Review Guide

Our Credit and Counterparty Manager (CCRM) Certificate Exam (8011) practice exam highlights mistakes at the end of each attempt, allowing you to overcome them before it's too late. This kind of approach is great for complete and flawless Credit and Counterparty Manager (CCRM) Certificate Exam (8011) test preparation. A free demo version is also available for satisfaction. This 8011 software provides a real Credit and Counterparty Manager (CCRM) Certificate Exam (8011) exam environment to help ease exam anxiety.

PRMIA 8011 Credit and Counterparty Manager (CCRM) Certificate Exam is a globally recognized certification that validates a candidate's knowledge and skills in credit and counterparty risk management. 8011 exam focuses on concepts such as credit risk analysis, credit derivatives, and counterparty risk management, including stress testing, collateral management, and default management. The credit and counterparty risk management function has become increasingly important given the growing complexity of financial markets and the need for effective risk management programs.

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q100-Q105):

NEW QUESTION # 100
What is the annualized steady state volatility under a GARCH model where alpha is 0.1, beta is 0.8 and omega is 0.00025?

  • A. 0.08
  • B. 0.05
  • C. 0.0025
  • D. 0.1

Answer: B

Explanation:
Steady state variance under the GARCH model is given by the formula #/(1 - # - #). In this case, steady state variance therefore works out to 0.00025/(1 - 0.1 - 0.8) = 0.0025. Since this is the variance, volatility is the square root of 0.0025, which works out to 0.05.
Thus, 5% (=0.05) is the correct answer, and the others are incorrect.
Also recall the following in respect of GARCH:
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NEW QUESTION # 101
There are three bonds in a diversified bond portfolio, whose default probabilities are independent of each other and equal to 1%, 2% and 3% respectively over a 1 year time horizon. Calculate the probability that exactly 1 of the three bonds will default.

  • A. 0%
  • B. .011%
  • C. 5.8%
  • D. 2%

Answer: C

Explanation:
The probability that only one of the three bonds will default is equal to the sum of the probabilities of the three scenarios where one bond defaults and the other two survive. This probability is given by 1%*(1 - 2%)* (1 - 3%) + (1 - 1%)*2%*(1 - 3%) + (1 - 1%)*(1 - 2%)*3% = 5.7818%. Choice 'c' is the correct answer.


NEW QUESTION # 102
Which of the following statements are correct:
I. A training set is a set of data used to create a model, while a control set is a set of data is used to prove that the model actually works II. Cleansing, aggregating or ensuring data integrity is a task for the IT department, and is not a risk manager's responsibility III. Lack of information on the quality of underlying securities and assets was a major cause of the collapse in the CDO markets during the credit crisis that started in 2007 IV. The problem of lack of historical data can be addressed reasonably satisfactorily by using analytical approaches

  • A. I and III
  • B. II and IV
  • C. I, III and IV
  • D. All of the above

Answer: A

Explanation:
Statement I is correct. Data is often divided into two sets - a 'training set' that is used to create and fine-tune the model while the 'control set' is used to prove that the model works on sample data. Back testing is then perfomed using actual data that becomes available over time, or may already be available as historical data.
Statement II is incorrect. A risk manager often spends a great deal of time in managing data, and ensuring that the data being used is accurate enough for the purpose it is being used for. A risk manager can expect to spend a good part of his or her team's time in cleansing data. While he or she can try to get the IT processes and systems to produce correct data in the first place so it requires minimal subsequent cleansing or validation, this task is likely to remain a key part of a risk manager's role for quite some time in the future given the challenges nearly all organizations face in managing risk data.
Statement III is correct. There was not enough granular data available on the underlying components of some of the derivative debt securities whose markets dried up during the crisis that began in 2007. This was because investors became increasingly unsure of what the value of these securities, such as CDOs was, leading to market seizure and firesale prices.
Statement IV is not correct. There is no easy solution to the lack of enough historical data, which is used to create as well as test models, and construct stress scenarios. Analytical approaches are not a good enough substitute for real market data. During the recent crisis, many instruments had rather short histories and there was not enough data available, and risk managers and portfolio managers relied upon analytical approaches to value and price them. Many of the assumptions that underpinned these approaches were untested in the real world and turned out to be incorrect.
Therefore Choice 'c' is the correct answer and the rest are incorrect.


NEW QUESTION # 103
Which of the following statements are true:
I. Pre-settlement risk is the risk that one of the parties to a contract might default prior to the maturity date or expiry of the contract.
II. Pre-settlement risk can be partly mitigated by providing for early settlement in the agreements between the counterparties.
III. The current exposure from an OTC derivatives contract is equivalent to its current replacement value.
IV. Loan equivalent exposures are calculated even for exposures that are not loans as a practical matter for calculating credit risk exposure.

  • A. I, II, III and IV
  • B. III and IV
  • C. II and IV
  • D. II and III

Answer: A

Explanation:
Pre-settlement risk is the risk that one of the counterparties defaults prior to the date for the maturity of the transaction in question. This may be an unrelated default, in fact there may have been no default on that particular contract, but the party may have defaulted on its other obligations, or filed for bankruptcy. To deal with such cases and to protect the interests of both the parties, it is common to provide for immediate termination of positions and settlement based on the current replacement value of the contracts. Therefore statements I and II are correct.
Statement III is correct as well - the exposure from an OTC derivative contract derives from its current replacement value, and not the notional. If the current replacement value is negative, then the credit exposure is considered equal to zero.
Statement IV is correct as it is quite common to restate all exposures - those from credit lines, OTC derivatives etc - in loan equivalent terms prior to estimating credit risk.


NEW QUESTION # 104
Which of the following are attributes of a robust stress testing programme at a bank?

  • A. Written policies and procedures
  • B. Data of appropriate quality and granularity
  • C. Robust systems infrastructure
  • D. All of the above

Answer: D

Explanation:
A bank's stress testing programme in relation to firm wide stress tests should document the type, frequency and the purpose of the programme, as well as methodologies for defining scenarios and the remedial actions envisaged. Choice 'b' is therefore a necessary attribute of a robust stress testing programme.
The programme should be supported by a robust systems infrastructure that allows the execution of periodic as well as ad-hoc stress tests at the right level (business unit, as well as firm-wide) at the right level of detail or granularity. Choice 'c' also therefore is a valid choice.
A related element is data quality - without which no stress tests can be be credible.
Therefore all the choices listed are correct and Choice 'd' is the correct answer.


NEW QUESTION # 105
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