GET UNPARALLELED PRACTICE 8011 EXAM PDF AND PASS EXAM IN FIRST ATTEMPT

Get Unparalleled Practice 8011 Exam Pdf and Pass Exam in First Attempt

Get Unparalleled Practice 8011 Exam Pdf and Pass Exam in First Attempt

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Tags: Practice 8011 Exam Pdf, Relevant 8011 Exam Dumps, 8011 Vce Test Simulator, PDF 8011 VCE, Pdf 8011 Version

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Obtaining the PRMIA 8011: Credit and Counterparty Manager (CCRM) Certificate is a valuable achievement for professionals working in the credit and counterparty risk management field. The certificate is recognized globally and demonstrates a candidate’s expertise and commitment to the field. The CCRM certification program and the PRMIA 8011 Exam are highly respected in the financial industry and are often considered a requirement for senior roles in credit and counterparty risk management.

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Relevant PRMIA 8011 Exam Dumps | 8011 Vce Test Simulator

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PRMIA 8011: Credit and Counterparty Manager (CCRM) Certificate exam is a certification program aimed at professionals with a keen interest in credit and counterparty risk management. The program is designed to provide a comprehensive understanding of the principles and practices of credit risk management, as well as the various tools and techniques used to manage counterparty risk.

PRMIA 8011 exam is a rigorous test of a candidate’s knowledge and skills in credit and counterparty risk management. 8011 Exam consists of multiple-choice questions and is designed to test a candidate’s understanding of the key concepts and principles covered in the CCRM certification program. Candidates are required to demonstrate their ability to apply these concepts and principles to real-world scenarios.

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q135-Q140):

NEW QUESTION # 135
Under the contingent claims approach to measuring credit risk, which of the following factors does NOT affect credit risk:

  • A. Cash flows of the firm
  • B. Leverage in the capital structure
  • C. Volatility of the firm's asset values
  • D. Maturity of the debt

Answer: A

Explanation:
Under the contingent claims approach, credit risk is modeled as the value of a put option on the value of the firm's assets with a strike equal to the face value of the debt and maturity equal to the maturity of the obligation. The cost of credit risk is determined by the leverage ratio, the volatility of the firm's assets and the maturity of the debt. Cash flows are not a part of the equation. Therefore Choice 'a' is the correct answer.


NEW QUESTION # 136
A bank evaluates the impact of large and severe changes in certain risk factors on its risk using a quantitative valuation model. Which of the following best describes this exercise?

  • A. Stress testing
  • B. Simulation
  • C. Sensitivity analysis
  • D. Scenario analysis

Answer: D

Explanation:
It is important to note the difference between sensitivity analysis and stress testing. Sensitivity analysis applies to measuring the effect of changes on the outputs of a model by varying the inputs - generally one input at a time.
In scenario analysis, a number of variables may be changed at the same time to see the impact on the dependent variable. For example, a bank may measure the changes in the value of its mortgage portfolio by varying its assumptions on prepayment expectations, interest rates and other factors, using its modeling software or application. The changes in the inputs may or may not relate to integrated real world situations that may arise. Sensitivity analysis is purely a quantitative exercise, much like calculating the delta of a portfolio.
A stress test may include shocks or large changes to input parameters but it does so as part of a larger stress testing programme that generally considers the interaction of risk factors, past scenarios etc. At its simplest, a stress test may be no different from a sensitivity analysis exercise, but that is generally not what is considered a stress test at large financial institutions.
A stress test may consider multiple scenarios, for example one scenario may include the events witnessed during the Asian crisis, another may include the events of the recent credit crisis. Simulation generally refers to a Monte Carlo or historical simulation, and is often a more limited exercise.
The exercise described in the question is the closest to a scenario analysis, therefore Choice 'c' is thecorrect answer.
It is important to note that all of the choices referred to in this question are related to each other, and the boundaries between them tend to be fuzzy. At what point does a complex sensitivity analysis start resembling a scenario, or a stress test can always be debatable, but such a debate would be more about the symantics than be of any practical use.


NEW QUESTION # 137
Stress testing is useful for which of the following purposes:
I). For providing the risk manager with an intuitive check on his risk estimates
II). Providing a means of communicating risk implications using plausible scenarios that can be easily explained to a non-technical audience
III). Guarding against major errors in the form of model risk
IV). Complying with the requirements of Basel II.

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

Answer: B

Explanation:
Stress testing is used for all the listed purposes. Therefore Choice 'a' is the correct answer.


NEW QUESTION # 138
Which of the following is not a tool available to financial institutions for managing credit risk:

  • A. Credit derivatives
  • B. Third party guarantees
  • C. Cumulative accuracy plot
  • D. Collateral

Answer: C

Explanation:
Collateral, limits to avoid credit exposure concentrations, termination rights based upon credit ratings, third party guarantees and credit derivatives are all tools or instruments that financial institutions use to manage their credit risk. A cumulative accuracy plot measures the accuracy ofratings, and is not a tool for managing credit risk. Therefore Choice 'b' represents the correct answer.


NEW QUESTION # 139
Which of the following statements is true:
I. If the sum of its parameters is less than one, GARCH is a mean reverting model of volatility, while EWMA is never mean reverting II. Standardized returns under both EWMA and GARCH show less non-normality than non standardized returns III. Steady state variance under GARCH is affected only by the persistence coefficient IV. Good risk measures are always sub-additive

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

Answer: D

Explanation:
GARCH is a mean reverting model of volatility, with a steady state mean that the model reverts to in the absence of market shocks. EWMA is not mean reverting and volatility under EWMA stays constant in the absence of shocks. Therefore statement I is correct.
Both EWMA and GARCH models are designed to address volatility clustering, which explainsmuch of the non-normality of returns. When returns are standardized to the volatility calculations under either of these methods, the returns appear far closer to the normal distribution than non-standardized returns. (If it were not to, then there would have been no point in using these techniques.) Statement II is correct.
Steady state variance under GARCH is defined as # / (1 - # - #), where # and # are the two parameters (called the reaction and persistence coefficient respectively). Clearly, it is affected by more than just the persistence coefficient, therefore statement III is not correct.
Sub-additivity is a very desired property in risk measures. It implies the sum of the parts is greater than the whole. In the case of risk measures, the whole is smaller than the sum of the parts due to diversification.
Statement IV is true.
Therefore the correct answer is Choice 'c'


NEW QUESTION # 140
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