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

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  II, III and IV only

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  I, II and IV only

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  All of the above

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  I and II only
  
  
  

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  competitive market conditions
  
  II. ensuring compliance with their corporate risk appetite and fiduciary responsibility toshareholders
  
  III. ensuring any discretionary bonus plans are geared towards keeping high income /revenue generators
  
  IV. reporting all such personnel to the local regulator
  
  

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  Market Risk

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  Credit Risk

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  Operational and Regulatory Compliance Risk

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  All of the Above
  
  
  

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  Market Risk

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  Credit Risk

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  Operational Risk

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  Both B and C
  
  
  

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

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

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  Ignore local rules and regulations

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  Respect local rules and regulations
  
  
  

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  I and II

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  I, II and IV

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  I, II and III

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  I only
  
  
  

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  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
  
  

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

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  the two banks were focussed in different markets

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

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  Of a general deterioration of credit quality generally
  
  
  

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  to buy calls and sell puts

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  to buy puts and sell calls

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  to sell puts and buy calls

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  to sell calls and buy puts
  
  
  

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  The Board of Directors, but only if the Blue Ribbon Panel affirms the change

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  The Board of Directors and a majority of the Members

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  The Board of Directors alone

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  34 of all Members
  
  
  

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  Define the organization's definition of risk management as articulated by the Board in clear and uncertain terms

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  Include financial risk management, compliance and external reporting and, to the extent that resources allow, should exclude legal or accounting

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  Be independently staffed and report to an employee who is on the Executive Committee
  (Operating Committee) but who is NOT a business unit leader

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  Review continually the application of the Principles of Good Governance to the Risk Management Infrastructure, financial accounting and reporting infrastructure and the organization as a whole
  
  
  

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  only regarded the intrinsic value (i.e. the difference between the strike price and the forward price of the underlying commodity) as the fair value of its options

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  took into account both the intrinsic value and the time value

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  only took into account the time value of the option (which includes recognizing the time left to maturity of the option, the volatility of the spot price of the underlying commodity, interest rates and other factors)

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  used neither the intrinsic value nor the time value