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  • Exam Code: 8008
  • Exam Name: PRM Certification - Exam III: Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP - 2015 Edition
  • No. of Questions: 359 Questions and Answers
  • Updated: Sep 09, 2026

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PRMIA 8008 Exam Syllabus Topics:

SectionObjectives
Topic 1: Operational Risk- Operational risk management techniques
  • 1. Risk and control self-assessment (RCSA)
    • 2. Loss event data collection
      • 3. Key risk indicators (KRI)
        - Operational risk types and sources
        Topic 2: Risk Management Frameworks- Enterprise risk management principles
        • 1. Risk identification and assessment processes
          • 2. Risk governance structure
            • 3. Risk appetite and tolerance
              - Risk measurement and reporting frameworks
              Topic 3: Funds Transfer Pricing (FTP)- Internal pricing of funds and liquidity allocation
              - FTP methodologies
              Topic 4: Asset-Liability Management (ALM)- Liquidity risk management
              - Interest rate risk in the banking book (IRRBB)
              Topic 5: Credit Risk- Credit portfolio risk
              - Credit risk measurement and modeling
              • 1. Exposure at default (EAD)
                • 2. Probability of default (PD)
                  • 3. Loss given default (LGD)
                    Topic 6: Counterparty Risk- Derivatives credit risk considerations
                    - Counterparty credit exposure
                    - Netting and collateral management
                    Topic 7: Market Risk- Market risk measurement techniques
                    • 1. Value at Risk (VaR)
                      • 2. Stress testing and scenario analysis
                        - Interest rate, equity, FX, and commodity risk

                        PRMIA PRM Certification - Exam III: Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP - 2015 Edition Sample Questions:

                        Which of the following carry greater counterparty risk: a forward contract on a 10 year note, or a commercial paper carrying a AA credit rating with identical maturity and notional?

                        • A. Credit risk can not be compared in these terms
                        • B. The forward contract has greater credit risk as its future gains are unknown
                        • C. They both carry the same credit risk
                        • D. The commercial paper has greater credit risk as the entire notional is outstanding
                        Answer: D

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                        Which of the following is not an approach proposed by the Basel II framework to compute operational risk capital?

                        • A. Factor based approach
                        • B. Standardized approach
                        • C. Basic indicator approach
                        • D. Advanced measurement approach
                        Answer: A

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                        For the purposes of calculating VaR, an FRA can be modeled as a combination of:

                        • A. a zero coupon bond and a floating rate note
                        • B. a fixed rate bond and a zero coupon bond
                        • C. two zero coupon bonds
                        • D. a zero coupon bond and an interest rate swap
                        Answer: C

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

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                        Which of the formulae below describes incremental VaR where a new position 'm' is added to the portfolio?
                        (where p is the portfolio, and V_i is the value of the i-th asset in the portfolio. All other notation and symbols have their usual meaning.) A)

                        B)

                        C)

                        D)

                        • A. Option D
                        • B. Option A
                        • C. Option B
                        • D. Option C
                        Answer: B

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