PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics
Last Update Oct 15, 2025
Total Questions : 110
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Boards of Directors, including Audit and Risk Committees must review thoroughly compensation plans of potentially "highly compensated positions" for:
I. competitive market conditions
II. ensuring compliance with their corporate risk appetite and fiduciary responsibility to shareholders
III. ensuring any discretionary bonus plans are geared towards keeping high income / revenue generators
IV. reporting all such personnel to the local regulator
Which is NOT part of the guidance on Professional Conduct in the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct)?
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
As a result of the US government's intervention, which of the following is true?
As LTCM started to have major losses, it compounded its problems by doing what?
The Risk Management Infrastructure of an organization must:
I. To the extent possible, avoid silos of control and oversight
II. Have budgets set by the business unit leaders
III. Actively provide ongoing professional development for risk management staff and require them to be committed to standards of best practice, conduct and ethics in their work
IV. Provide general risk management and related corporate governance training for employees of the organization as a Whole
For the sentence
"The organization shall encourage all employees to keep abreast of the latest developments in their particular areas of expertise, through ____________, _____________, and _____________ and shall make adequate resources available to enable this to occur,"
Choose the correct combinations of words from the following options:
With respect to the Purpose of Professional Standards, in the event of any difference in standards between local laws/rules and those of PRMIA, members must
As a PRMIA member, you have certain responsibilities. Among these are the requirement(s) to:
When describing the reasons for the collapse of China Aviation Oil, which of the following was not cited?
Which of the following would have contributed to noticing and preventing Leeson's violations at Barings?
TESTED 15 Oct 2025
