From Latest 8011 Exam Format to Credit and Counterparty Manager (CCRM) Certificate Exam, Eastest Way to Pass
From Latest 8011 Exam Format to Credit and Counterparty Manager (CCRM) Certificate Exam, Eastest Way to Pass
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Tags: Latest 8011 Exam Format, 8011 Instant Discount, 8011 Latest Training, 8011 Latest Test Answers, Exam 8011 Braindumps
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PRMIA 8011 Exam covers a wide range of topics related to credit risk management, including credit analysis, credit policies, credit risk measurement, counterparty credit risk, and regulatory requirements. 8011 course aims to equip professionals with the analytical tools and techniques required to manage credit risk effectively. Credit and Counterparty Manager (CCRM) Certificate Exam certification is suitable for professionals in the banking, investment, and finance industries, as well as for those who are interested in pursuing a career in credit risk management.
Credit and Counterparty Manager (CCRM) Certificate Exam vce files, valid free PRMIA 8011 vce dumps
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PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q176-Q181):
NEW QUESTION # 176
Which of the following is not an example of a risk concentration?
- A. Location of a portfolio's assets in a single country but spread across different industries
- B. Large combined positions in assets affected by different risk factors that are highly correlated
- C. Material amounts of treasury obligations held as collateral provided by a single counterparty
- D. Origination of a large number of SIVs with exposures to the same asset class, where the SIVs are separate legal entities without recourse to the originator
Answer: C
Explanation:
Choice 'd' represents a risk concentration due to excessive exposure to a single country, even though spread across different industries as the risk factors (economy, exchange rate, interest rate, political risk etc) are the same for all companies in the country.
Choice 'a' represents a risk concentration because even though the risk factors are different, they are highly correlated and therefore effectively behave as one. These undetected correlations proved to be fatal to many financial institutions during the credit crisis.
Choice 'b' represents a risk concentration as was borne out by the recent credit crisis. Large banks had to take over the obligations of SIVs they had created, even though the SIVs were separate legal entities with no legally enforceable recourse to the originating bank. This had to be done for moral and reputational reasons, and banks had to absorb the losses of these supposedly separate vehicles.
Choice 'c' does not represent a risk concentration, in fact it is not a risk at all because it refers to collateral held, even though the collateral may have been provided by the same counterparty. In this case the risk is to the party providing the collateral (in case the party holding the collateral rehypothecates or sells the collateral and is unable to return it).
Therefore Choice 'c' is the correct answer.
The BCBS document on stress testing provides a very nice articulation of risk concentration, and the relevant text from that document is produced verbatim here: [Risk concentration] may arise along different dimensions: single name concentrations; concentrations in regions or industries; concentrations in single risk factors; concentrations that are based on correlated risk factors that reflect subtler or more situation-specific factors, such as previously undetected correlations betweenmarket and credit risks, as well as between those risks and liquidity risk; concentrations in indirect exposures via posted collateral or hedge positions; concentrations in off-balance sheet exposure, contingent exposure, non-contractual obligations due to reputational reasons.
NEW QUESTION # 177
What is the 1-day VaR at the 99% confidence interval for a cash flow of $10m due in 6 months time? The risk free interest rate is 5% per annum and its annual volatility is 15%. Assume a 250 day year.
- A. 0
- B. 1
- C. 2
- D. 3
Answer: B
Explanation:
The $10m cash flow due in 6 months is equivalent to a bond with a present value of 10m/(1.05)