Free PRMIA 8008 Exam Dumps Questions & Answers

For a US based investor, what is the 10-day value-at risk at the 95% confidence level of a long spot position of EUR 15m, where the volatility of the underlying exchange rate is 16% annually. The current spot rate for EUR is 1.5. (Assume 250 trading days in a year).

• A.2632000
• B.5922000
• C.526400
• D.1184400

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.All of the above
• C.II and III
• D.I and III

Which of the following statements is a correct description of the phrase present value of a basis point?

• A.It is another name for duration
• B.It is the principal component representation of the duration of a bond
• C.It refers to the present value impact of 1 basis point move in an interest rate on a fixed income security
• D.It refers to the discounted present value of 1/100th of 1% of a future cash flow

Under the basic indicator approach to determining operational risk capital, operational risk capital is equal to:

• A.15% of the average gross income of the past five years
• B.25% of the average gross income (considering only the positive years) of the past three years
• C.15% of the average net income (considering only the positive years) of the past three years
• D.15% of the average gross income (considering only the positive years) of the past three years

Which of the following statements are true:
I. Credit risk and counterparty risk are synonymous
II. Counterparty risk is the contingent risk from a counterparty's default in derivative transactions III. Counterparty risk is the risk of a loan default or the risk from moneys lent directly IV. The exposure at default is difficult to estimate for credit risk as it depends upon market movements

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