← Back to exam page

8009 – Exam IV: Case Studies: Standards: Governance, Best Practices and Ethics - 2015 Edition

Loading demo links...

Showing 4–6 of 10 questions

Question 4

When local rules and regulations conflict with the PRMIA Standards of Best Practice,

Conduct and Ethics the PRMIA member should …

Select an option, then click Submit answer.

  • ○

    Seek advice from a qualified party, being mindful of legal and confidentiality requirements

  • ○

    Modify the interpretation of local rules and regulations to meet the situation

  • ○

    Ignore local rules and regulations

  • ○

    Respect local rules and regulations


Question 5

A risk manager is asked to analyze the credit risk of a convertible bond. The risk manager has never analyzed convertible bonds, but does have significant expertise in credit risk. The risk manager accepts the assignment, finds a paper on the subject through the PRMIA web site and copies the method used there. The risk manager completes the assignment and delivers a report to his or her direct supervisor and the supervisor is quite pleased.

According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of

Conduct), this was acceptable behavior if the following conditions were met:

I. The risk manager disclosed the lack of knowledge about convertible bonds

II. The methodology employed is disclosed and explained

III. The report was just to be used for analysis and not in practice

IV. The risk manager was sure of his/her understanding of the paper found on the web

Select an option, then click Submit answer.

  • ○

    I and II

  • ○

    I, II and IV

  • ○

    I, II and III

  • ○

    I only


  • ○

    The risk manager disclosed the lack of knowledge about convertible bonds

    II. The methodology employed is disclosed and explained

    III. The report was just to be used for analysis and not in practice

    IV. The risk manager was sure of his/her understanding of the paper found on the web
Question 6

Washington Mutual's acquisition of Long Beach Financial changed its business model and increased its credit loss profile because

Select an option, then click Submit answer.

  • ○

    The resulting loss rate for Washington Mutual was more than 3 times higher than other mortgage lenders tracked by the FDIC

  • ○

    the two banks were focussed in different markets

  • ○

    Long Beach Financial had losses which it hadn't realized at the time of the takeover

  • ○

    Of a general deterioration of credit quality generally