2024 PRMIA 8020 Exam Dumps Questions

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1. In order for a KRI to be effective it must be:

Quantitative and Qualitative. Consistent. Efficient & Repeatable.

Qualitative, Consistent Efficient & Repeatable.

Quantitative, Consistent and Comparable. Efficient & Repeatable

Quantitative, Repeatable and Efficient.

2. Which of the following statements is best for inclusion in the values to be set for a Risk Function?

We prize the ability to implement the management team's direction on the control of risks.

We prize the ability to implement the board's direction on the implementation of controls for risks.

We prize the ability to ensure that the Risk Function's opinions are listened to and acted upon.

We prize the ability to lower risk-taking to an absolute minimum - zero if possible.

3. Which of the following best describes the role of the compliance department?

A. The compliance department is responsible for implementing the first line's compliance risk management controls.

B. The compliance department is responsible for providing oversight over the auditor's implementation of compliance risk management controls.

C. The compliance department is responsible for providing oversight over the board's implementation of compliance risk management controls.

D. The compliance department is responsible for providing oversight over the first line's implementation of compliance risk management controls.

4. Risk Capacity for a bank is defined as the:

Amount of risk the bank wishes to take.

Amount of risk the regulator sets for the bank.

Ability to withstand an extreme event and make a profit.

Ability to suffer an extreme event with an orderly wind up with only shareholders losing money.

5. Which of the following are the most relevant ways a firm can ensure they are in line with consumer protection?

A. Engage with consumers once there are enough complaints.

B. Add a consumer protection section to all reports.

C. Treat customers fairly, place customer interests ahead of its own and keep promises to customers

D. This risk cannot be managed.

6. Which of the following is not an action available to management and the governing body to align the strategy with Risk Capacity.

Reduce scale of risks - shrink balance sheet or activity levels.

Improve quality of risks - pursue lower rewarding risks with better prospects.

Reduce retained earning - by increasing dividends in order to return funds to investors and improve reputation.

Improve retained earnings - by increasing net income or reducing dividends in order to increase risk capacity.

7. Which of the following principles best applies to a compliance function?

The compliance function should report to the business (even when following a three lines of defense model).

The compliance function should be independent of the business (following a three lines of defense model).

The compliance function should be outsourced if there is a risk function.

The risk function should be outsourced if there is a compliance function.

8. For the Northern Rock case study, what was the low-probability-high-impact event that was most responsible for the loss event?

The acquisition of Merrill Lynch by Bank of America.

The Bank of England's withdrawal of Deposit Protection.

Liquidity dried up in the inter-bank and commercial paper markets.

An exposure to real estate funds, heavily concentrated in Berlin.

9. For the Barings case study, what external event may have accelerated the discovery of the loss event?

A. The collapse of Lehman Brothers into bankruptcy in 2002.

B. The Singapore earthquake of January 17th 1995.

C. The collapse of Lehman Brothers into bankruptcy m 2008.

D. The Kobe earthquake of January 17th 1995.

10. Ideally, which of the following should be completed as part of the risk assessments of service providers?

An assessment of a third party should include its compliance and risk infrastructure, financials, business strategy and operating history.

An assessment of a third party should not include its compliance and risk infrastructure, financials, business strategy and operating history.

Onsite visits are not advantageous for understanding the third party's risks and control environment.

A review of the pay levels of the staff supporting the service.

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11. ISO 27000 relates to what topic / area?

Environmental, social, and governance (ESG) investing.

Information Security Systems.

International Risk Management.

Auditing of financial controls.

12. Which of the following is a correct statement about control rating scales?

They are enhanced by the use of software that includes inherent risk.

A control rating scale should consider control effectiveness but not control performance.

A control rating scale should consider both control effectiveness and control performance.

A control rating scale should consider neither control effectiveness or control performance.

13. Stafford Beers Viable System Model (VSM) has several implementation elements.

Which of the following is not one of these?

A. Governance

B. Input

C. Process

D. Output

14. For the FTX case study, what was the "backdoor" used for?

It allowed a stable coin to be removed from the ledger and added to the balance sheet.

It allowed trading firm Alameda to borrow S65 billion of clients' money from the exchange without their permission.

It allowed currency traders to smooth profits and conceal losses for over two years.

It allowed a rapid pace of acquisitions but poor integration of acquired companies.

15. Managing financial crime is a part of risk and compliance for many firms.

Which of the following is a useful control to help reduce this risk?

A. Having the business be a cash only business and not report any transactions.

B. The requirements to trace all transactions when they are entered into spreadsheets.

C. Development of scenarios and red flags that are used to monitor transactions and identify suspicious customers and activities.

D. Local regulations that allow a bank to not report transactions by family members of the board.

16. Internal loss data (ILD) consists of what kind of data?

A. It consists of near miss operational loss incidents of a bank.

B. It consists of historical operational loss incidents of a bank.

C. It consists of the Key Risk Indicators of a bank.

D. It consists of scenario data develeloped to calcuate the future operational loss incidents of a bank.

17. Which of the below is accurate about a risk assessment workshop?

The workshop should be run spontaneously so that proper discussion can take place.

Although workshops will take on their own form; it is best to prepare thoroughly ahead of time.

Risk management should not attend the workshop so that proper discussion can take place.

Compliance experts should not attend the workshop so that proper discussion can take place.

18. Which of the follow is not included in PRMIA's 10 principles of good governance?

A. Risk appetite.

B. Holding the PRM Designation.

C. External validation.

D. Clear accountability.

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2024 PRMIA 8020 Exam Dumps Questions

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