PRMIA 8004 : PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics

8004 real exams

Exam Code: 8004

Exam Name: PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics

Updated: Sep 16, 2026

Q & A: 112 Questions and Answers

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PRMIA 8004 Exam Syllabus Topics:

SectionObjectives
Best Practices in Risk Management- Enterprise risk management frameworks
- Operational and financial risk controls
Case Study Application- Governance and ethics decision analysis
- Integrated risk assessment scenarios
Governance, Standards and Regulatory Frameworks- Regulatory expectations and compliance structures
- Risk governance principles in financial institutions
Ethics and Professional Standards- Industry codes of ethics and decision-making standards
- Professional conduct and ethical responsibilities

PRMIA PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Sample Questions:

Question #1

The problems which initiated the crisis at Northern Rock during the summer of 2007 were:

  • A. Large customer withdrawals despite the UK regulator and the UK Treasury giving assurances that the bank was solvent
  • B. A general lack of confidence in mortgage backed securities associated in large part with developments in the US sub-prime mortgage market, and doubts emerging about the viability of the Northern Rock business model
  • C. Doubts arising about the viability of the business model which necessitated Bank of England intervention
  • D. A depositor run on the bank, following doubts about the viability of the Northern Rock business model
Reveal Solution  Discussion  0

Correct Answer: B  🗳️

Question #2

Unlike the case at Barings Bank, National Australia Bank:

  • A. Had a risk management infrastructure that was credited with doing its' job well, despite the losses
  • B. Was not dealing in derivatives
  • C. Had a separation of duties between trading and back office
  • D. Had a Board of Directors that was unaware of the true nature of trading activities
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

Question #3

Which of the following was the key contributory risk factor to the problems at LTCM in the summer of 1998?
I Model Risk
II Lack of Transparency
III Breakdown of Historical Correlations
IV Over Regulation by Federal Regulators

  • A. III and IV only
  • B. III only
  • C. I and III only
  • D. All of these were key elements of the problems at LTCM
Reveal Solution  Discussion  0

Correct Answer: B  🗳️

Question #4

Which of the following was NOT a factor in the Long Term Capital Management case?

  • A. Unwinding of liquid positions at the beginning of major losses
  • B. Model risk
  • C. Inadequate separation of front and back offices
  • D. Changes/breakdowns in historical correlations
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

Question #5

Which of the following CANNOT be counted as a reason why LTCM was given a rescue package and not left to default?

  • A. Some of the banks in the rescue consortium were LTCM investors
  • B. The consortium wanted to keep this out of the regulators' eyes
  • C. Untimely unwinding of some LTCM positions would lead to large market fluctuations and possible turmoil
  • D. Many of the banks in the rescue consortium were among LTCM's counterparties
Reveal Solution  Discussion  0

Correct Answer: B  🗳️

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