Free PRMIA 8008 Exam Dumps Questions & Answers

A corporate bond maturing in 1 year yields 8.5% per year, while a similar treasury bond yields 4%. What is the probability of default for the corporate bond assuming the recovery rate is zero?

• A.Cannot be determined from the given information
• B.8.50%
• C.4.15%
• D.4.50%

Which of the following would not be a part of the principal component structure of the term structure of futures prices?

• A.Parallel component
• B.Curvature component
• C.Trend component
• D.Tilt component

Which of the following losses can be attributed to credit risk:
I. Losses in a bond's value from a credit downgrade
II. Losses in a bond's value from an increase in bond yields
III. Losses arising from a bond issuer's default
IV. Losses from an increase in corporate bond spreads

• A.I and III
• B.I and II
• C.II and IV
• D.I, III and IV

Conditional default probabilities modeled under CreditPortfolio view use a:

• A.Probit function
• B.Logit function
• C.Altman's z-score
• D.Power function

Which of the following statements are true:
I. Liquidity risks during time of crisis may be exacerbated by large collateral calls continuing over a period of time.
II. Stress tests are always separately modeled from VaR computations which cannot deal with stress scenarios of the kind considered in stress tests.
III. A maximum loss scenario considers the maximum possible loss given a 'plausibility constraint' that is based upon the joint probability of such a loss happening

• A.I and III
• B.I and II
• C.II and III
• D.I, II and III