Free 8012 – Market . Liquidity and Asset Liability Management Risk Manager (MLARM) Certificate Exam Practice Test Question

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• ○ Loss from adverse price movements
• ○ Loss from borrower loan defaults
• ○ Loss from internal process failures
• ○ Loss from natural disaster damage

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• ○ Sensitivity to time decay passage
• ○ Sensitivity to underlying price change
• ○ Sensitivity to volatility level change
• ○ Sensitivity to interest rate change

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• ○ How time decay accelerates daily
• ○ How volatility affects option value
• ○ How delta changes with price
• ○ How dividends affect option value

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• ○ Guarantee daily trading profits
• ○ Eliminate need for hedging
• ○ Replace trader position limits
• ○ Keep potential losses within tolerance

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• ○ Time needed to close positions
• ○ Time since position was opened
• ○ Regulatory reporting cycle length
• ○ Trader performance review period

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• ○ Standalone loss of new trade
• ○ Change in total portfolio VaR
• ○ Capital charge for new trade
• ○ Liquidity cost of new trade

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• ○ Value at risk estimation
• ○ Sensitivity based Greek measures
• ○ Accounting book value method
• ○ Customer deposit trend method

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• ○ Trader self certification only
• ○ Independent risk limit monitoring
• ○ Marketing review of positions
• ○ New product approval process

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• ○ Office relocation cost shocks
• ○ Staff bonus accrual shocks
• ○ Interest rate parallel shifts
• ○ Equity market crash scenarios

Answer is in the explanation below.

Answer is in the explanation below.

Answer is in the explanation below.