Exam 8011 Training, Valid 8011 Braindumps

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The DumpsReview 8011 PDF questions file, desktop practice test software, and web-based practice test software, all these three 8011 practice test questions formats are ready for instant download. Just download any PRMIA 8011 Exam Questions format and start this journey with confidence.

PRMIA 8011 CCRM certification exam is a rigorous test that measures the candidate's knowledge and skills in credit and counterparty risk management. 8011 exam is designed to test a candidate's ability to analyze credit risk, understand quantitative models, and assess counterparty risk. It also evaluates the candidate's competence in identifying risk factors and designing strategies to mitigate them.

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The PRMIA 8011 practice test questions are getting updated on the daily basis and there are also up to 1 year of free updates. Earning the PRMIA 8011 certification exam is the way to grow in the modern era with high-paying jobs. The 24/7 support system is available for the customers so that they can get the solution to every problem they face and pass Credit and Counterparty Manager (CCRM) Certificate Exam (8011) exam. You can also evaluate the 8011 prep material with a free demo. Buy Now!

To become certified as a Credit and Counterparty Manager (CCRM) by PRMIA, candidates must pass a rigorous examination that tests their knowledge of credit and counterparty risk management. 8011 Exam is divided into two parts: the first part covers the fundamentals of credit and counterparty risk management, while the second part focuses on more advanced topics such as credit derivatives and structured finance.

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q206-Q211):

NEW QUESTION # 206
For identical mean and variance, which of the following distribution assumptions will provide a higher estimate of VaR at a high level of confidence?

A. A distribution with kurtosis = 3
B. A distribution with kurtosis = 2
C. A distribution with kurtosis = 0
D. A distribution with kurtosis = 8

Answer: D

Explanation:
A fat tailed distribution has more weight in the tails, and therefore at a high level of confidence the VaR estimate will be higher for a distribution with heavier tails. At relatively lower levels of confidence however, the situation is reversed as the heavier tailed distribution will have a VaR estimate lower than a thinner tailed distribution.
A higher level of kurtosis implies a 'peaked' distribution with fatter tails. Among the given choices, a distribution with kurtosis equal to 8 will have the heaviest tails, and therefore a higher VaRestimate. Choice 'a' is therefore the correct answer. Also refer to the tutorial about VaR and fat tails.

NEW QUESTION # 207
Which of the following is true for the actuarial approach to credit risk modeling (CreditRisk+):

A. The number of defaults is modeled using a binomial distribution where the number of defaults are considered discrete events
B. The approach considers only default risk, and ignores the risk to portfolio value from credit downgrades
C. The approach is based upon historical rating transition matrices
D. Default correlations between obligors are accounted for using a multivariate normal model

Answer: B

Explanation:
The actuarial model considers defaults to follow a Poisson distribution with a given mean per period, and these are binary in nature, ie a default happens or it does not happen. The model does not consider the loss of value from credit downgrades, and focuses only on defaults. The model also does not consider default correlations between obligors. Therefore Choice 'c' is the correct answer.
The other choices are not true statements that would apply to the actuarial approach.

NEW QUESTION # 208
In estimating credit exposure for a line of credit, it is usual to consider:

A. only the value of credit exposure currently existing against the credit line as the exposure at default.
B. the present value of the line of credit at the agreed rate of lending.
C. a fixed fraction of the line of credit to be the exposure at default even though the currently drawn amount is quite different from such a fraction.
D. the full value of the credit line to be the exposure at default as the borrower has an informational advantage that will lead them to borrow fully against the credit line at the time of default.

Answer: C

Explanation:
Choice 'a' is the correct answer. Exposures such as those to a line of credit of which only a part (or none) may be drawn at the time of assessment present a difficulty when attempting to quantify credit risk. It is not correct to take the entire amount of the line as the exposure at default, and likewise the current exposure is likely to be too aggressively low a number to consider.
While the borrower has an information advantage in that he would be aware of the deterioration in credit standing before the bank and would probably draw cash prior to default, it is unlikely that the entire amount of the line of credit would be drawn in all cases. In some cases, none may be drawn. In other cases, the bank would become aware of the situation and curtail or cancel access to the credit line in a timely fashion.
Therefore a fixed proportion of existing credit lines is considered a reasonable approximation of the exposure at default against credit lines.

NEW QUESTION # 209
Which of the following correctly describes a reverse stress test:

A. Stress tests that start from a known stress test outcome and then ask what events could lead to such an outcome for the bank
B. A stress test that requires a role reversal between risk managers and the risk taking business units in order to determine credible scenarios
C. Stress tests that are prescribed and conducted by a regulator in addition to the tests done by a bank
D. A stress test that considers only qualitative factors that go beyond mathematical modeling to examine feedback loops and the effect of macro-economic fundamentals

Answer: A

Explanation:
Generally, stress tests consider a shock or a severe scenario in order to determine the 'what-if' that circumstance were to materialize. They focus on the outcome based upon a set of shocks. In a reverse stress test, the outcome is assumed to be known (generally something as severe as bankruptcy, non-compliance with capital requirements etc), and the test is intended to work out what shocks or events would lead to such an outcome.
Reverse stress tests therefore start from a known stress test outcome (such as breaching regulatory captial ratios, illiquidity or insolvency) and then asking what events could lead to such an outcome for the bank. This can be quite a challenging task. Principle 9 laid out in the BCBS document on stress testing (May 2009) (which is part of the PRM syllabus effective March 1, 2010) lays down the expectations relating to reverse stress tests.
Therefore Choice 'a' is the correct answer. All the other choices are nonsensical.

NEW QUESTION # 210
Which of the following are considered properties of a 'coherent' risk measure:
I. Monotonicity
II. Homogeneity
III. Translation Invariance
IV. Sub-additivity

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

Answer: A

Explanation:
All of the properties described are the properties of a 'coherent' risk measure.
Monotonicity means that if a portfolio's future value is expected to be greater than that of another portfolio, its risk should be lower than that of the other portfolio. For example, if the expected return of an asset (or portfolio) is greater than that of another, the first asset must have a lower risk than the other. Another example: between two options if the first has a strike price lower than the second, then the first option will always have a lower risk if all other parameters are the same. VaRsatisfies this property.
Homogeneity is easiest explained by an example: if you double the size of a portfolio, the risk doubles. The linear scaling property of a risk measure is called homogeneity. VaR satisfies this property.
Translation invariance means adding riskless assets to a portfolio reduces total risk. So if cash (which has zero standard deviation and zero correlation with other assets) is added to a portfolio, the risk goes down. A risk measure should satisfy this property, and VaR does.
Sub-additivity means that the total risk for a portfolio should be less than the sum of its parts. This is a property that VaR satisfies most of the time, but not always. As an example, VaR may not be sub-additive for portfolios that have assets with discontinuous payoffs close to the VaR cutoff quantile.

NEW QUESTION # 211
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Exam 8011 Training, Valid 8011 Braindumps

Valid 8011 Braindumps & 8011 Certification Exam Infor

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q206-Q211):

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