Free Practice PRMIA 8010 Exam Questions 2025

Stay ahead with 100% Free Operational Risk Manager (ORM) 8010 Dumps Practice Questions

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Total 242 Questions | Updated On: Apr 23, 2025

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Question 1

Once the frequency and severity distributions for loss events have been determined, which of the following is an accurate description of the process to determine a full loss distribution for operational risk?

A : A firm wide operational risk distribution is generated by adding together the frequency and severity distributions

B : A firm wide operational risk distribution is generated using Monte Carlo simulations

C : A firm wide operational risk distribution is set to be equal to the product of the frequency and severity distributions

D : The frequency distribution alone forms the basis for the loss distribution for operational risk

Answer: B

Question 2

Under the KMV Moody's approach to calculating expectingdefault frequencies (EDF), firms' default on obligations is likely when:

A : expected asset values one year hence are below total liabilities

B : asset values reach a level below short term debt

C : asset values reach a level below totalliabilities

D : asset values reach a level between short term debt and total liabilities

Answer: D

Question 3

For a hypotherical UoM, the number of losses in two non-overlapping datasets is 24 and 32 respectively. The Pareto tail parameters for the two datasets calculated using the maximum likelihood estimation method are 2 and 3. What is an estimate of the tail parameter of the combined dataset?

A : 2.57

B : 2.23

C : 3

D : Cannot be determined

Answer: A

Question 4

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 identicalmaturity and notional?

A : The forward contract has greater credit risk as its future gains are unknown

B : Credit risk can not be compared in these terms

C : They both carry the same credit risk

D : The commercial paper has greater credit risk as the entire notional is outstanding

Answer: D

Question 5

A risk management function is best organized as:

A : integrated with the risk taking functions as risk management should be a pervasive activity carried out at all levels of theorganization.

B : report independently of the risk taking functions

C : reporting directly to the traders, as to be closest to the point at which risks are being taken

D : a part of the trading desks and other risk taking teams

Answer: B

Page: 1 / 49

Total 242 Questions | Updated On: Apr 23, 2025

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