Free PRMIA 8008 Exam Dumps Questions & Answers

Which of the following are valid methods for selecting an appropriate model from the model space for severity estimation:
I. Cross-validation method
II. Bootstrap method
III. Complexity penalty method
IV. Maximum likelihood estimation method

• A.  I and IV
• B.  All of the above
• C.  II and III
• D.  I, II and III

A Bank Holding Company (BHC) is invested in an investment bank and a retail bank. The BHC defaults for certain if either the investment bank or the retail bank defaults. However, the BHC can also default on its own without either the investment bank or the retail bank defaulting. The investment bank and the retail bank's defaults are independent of each other, with a probability of default of 0.05 each. The BHC's probability of default is 0.11.
What is the probability of default of both the BHC and the investment bank? What is the probability of the BHC's default provided both the investment bank and the retail bank survive?

• A.  0.08 and 0.0475
• B.  0.05 and 0.0125
• C.  0.0475 and 0.10
• D.  0.11 and 0

Which of the below are a way to classify risk governance structures:

• A.  Reactive, Preventative and Active
• B.  Active and Passive
• C.  Top-down and Bottom-up
• D.  Committee based, regulation based and board mandated

What would be the correct order of steps to addressing data quality problems in an organization?

• A.  Call in external consultants
• B.  Design the future state, perform a gap analysis, analyze the current state and implement the future state
• C.  Articulate goals, do a 'strategy-fit' analysis and plan for action
• D.  Assess the current state, design the future state, determine gaps and the actions required to be implemented to eliminate the gaps

Which of the following steps are required for computing the aggregate distribution for a UoM for operational risk once loss frequency and severity curves have been estimated:
I. Simulate number of losses based on the frequency distribution
II. Simulate the dollar value of the losses from the severity distribution III. Simulate random number from the copula used to model dependence between the UoMs IV. Compute dependent losses from aggregate distribution curves

• A.  All of the above
• B.  None of the above
• C.  I and II
• D.  III and IV