Free PRMIA 8010 Exam Dumps Questions & Answers

When compared to a high severity low frequency risk, the operational risk capital requirement for a low severity high frequency risk is likely to be:

• A.  Higher
• B.  Zero
• C.  Unaffected by differences in frequency or severity
• D.  Lower

Which of the following best describes Altman's Z-score

• A.  A standardized z based upon the normal distribution
• B.  A numerical computation based upon accounting ratios
• C.  A calculation of defaultprobabilities
• D.  A regression of probability of survival against a given set of factors

A loan portfolio's full notional value is $100, and its value in a worst case scenario at the 99% level of confidence is $65. Expected losses on the portfolio are estimated at 10%. What is the level of economic capital required to cushion unexpected losses?

• A.  35
• B.  25
• C.  10
• D.  65

Altman's Z-score does not consider which of the following ratios:

• A.  Net income to total assets
• B.  Working capital to totalassets
• C.  Market capitalization to debt
• D.  Sales to total assets

Changes in which of the following do not affect the expected default frequencies (EDF) under the KMV Moody's approach to credit risk?

• A.  Changes in asset volatility
• B.  Changes in the debt level
• C.  Changes in the firm's market capitalization
• D.  Changes in the risk free rate