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PRMIA PRM 8004

8004

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

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PRMIA 8004 Exam Syllabus Topics:

SectionObjectives
Topic 1: Standards & Practices- Principles of Good Governance Principles, PRMIA
- Bylaws of Professional Risk Managers' International Association, PRMIA
- Standards of Best Practice, Conduct and Ethics, PRMIA Ethics Committee
- Group of Thirty Best Practices, Global Derivatives Study Group
Topic 2: Case Studies- Bankers Trust
- Fannie Mae and Freddie Mac
- FTX
- Washington Mutual (Wamu)
- WorldCom
- Silicon Valley Bank
- Orange County
- Operational Resilience at TSB
- American Insurance Group (AIG)
- Long Term Capital Management (LTCM)
- Metallgesellschaft
- Barings
- Northern Rock
- Lehman Brothers
- National Australia Bank (NAB) - FX Options

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

Question #1
For the sentence
"The organization should have at its disposal employees who have adequate _________, ________ and _______ to perform the tasks assigned to them", Choose the correct combination of words from the following options:

A. experience, skills, previous successes
B. knowledge, skills, expertise
C. track record, expertise, skills
D. risk appetite, knowledge, expertise


Question #2
Which of the following was a key problem in the Barings Bank case?

A. Difference in the contract sizes in the OSE and SIMEX
B. Leeson was executing an arbitrage strategy even though he was not authorized to do so
C. The different time zones that the office was trading in
D. Having the back office and front office operations under the same person


Question #3
The "Renewing the Dream" program signed into law by President George W Bush in 2002 was designed to

A. Provide tax credits of nearly US$2.4 billion over the next 5 years to investors and builders who developed affordable single-family housing in poor and distressed areas
B. Provide grants of US$800 million to help home buyers with down-payment and closing costs
C. Allow risky, high-cost loans to be credited towards affordable housing goals
D. Recapitalise Fannie Mae and Freddie Mac with US$2.4 billion of additional capital to ensure they weathered the risks associated with any future downturn in the housing markets


Question #4
PwC concluded that the accounting policy adopted by China Aviation Oil was incorrect because it

A. took into account both the intrinsic value and the time value
B. only regarded the intrinsic value (i.e. the difference between the strike price and the forward price of the underlying commodity) as the fair value of its options
C. only took into account the time value of the option (which includes recognizing the time left to maturity of the option, the volatility of the spot price of the underlying commodity, interest rates and other factors)
D. used neither the intrinsic value nor the time value


Question #5
Corporate Governance ...

A. Eliminates risk to the greatest extent possible
B. Is defined as the assembled knowledge and wisdom of the collective stakeholders in the organization, set to maximize shareholder value
C. Is defined as business decision making predicated on a belief in potential rewards, balanced with the knowledge, understanding and appreciation of the risk taken to pursue those potential rewards
D. Is defined as that which is best practiced within an enterprise risk management framework, guided by the PRMIA Standards of Best Practice, Conduct and Ethics above all else


Solutions:

Question #1
Correct Answer: B
Question #2
Correct Answer: D
Question #3
Correct Answer: A
Question #4
Correct Answer: B
Question #5
Correct Answer: C

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