Which of the following was not considered to be a positive outcome of the Northern Rock Case Study?

• A.The original successful business model had not stress tested sufficiently for the incidence of Low Probability, High Impact incidents
• B.The role of the UK government and the possible underwriting of risks by tax-payers, and the general question of Moral Hazard
• C.It emphasised the importance of effective governance arrangements within financial firms
• D.The reform of the Deposit Protection Scheme because of its internal inconsistencies

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A risk manager finds that a client is engaged in a practice that looks like money laundering.
According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), the risk manager should:

• A.Report the findings immediately to authorities
• B.Report this conduct to their immediate supervisor
• C.Respect the client's confidentiality as that takes precedence
• D.Approach the client about the concern, regardless of what their reaction might be

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As LTCM started to have major losses, it compounded its problems by doing what?

• A.Returning capital to the general partners before others
• B.Trying to borrow more money from major money centre banks
• C.Issuing Subordinated Debt
• D.Unwinding its' more liquid trades thereby creating more liquidity risk overall

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When Fannie Mae and Freddie Mac were taken under US government conservatorship, which of the following was not included within their operating mandate?

• A.Fannie Mae and Freddie Mac will continue to buy home loans from banks to repackage them as mortgage-backed securities
• B.The US government will provide capital as needed in return for preferred shares in the companies
• C.The US government will buy mortgage-backed securities in the open market as needed
• D.There was a 2 year limit to the conservatorship

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Which US regulatory authority resolved the restructuring of Washington Mutual?

• A.Federal Deposit Insurance Corporation
• B.None of the above
• C.The Office of Thrift Supervision
• D.The Federal Reserve Bank

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