PRM Certification 8009 Book

Exam IV: Case Studies: Standards: Governance, Best Practices and Ethics - 2015 Edition Questions and Answers

Question 13

Which of the following was NOT a factor in the National Australia Bank case?

Rogue traders

Improper or insufficient Board-level communication regarding the importance of risk management and oversight

Inadequate back office procedures

Money laundering using foreign exchange trades for political leaders

Question 14

Which of the following was not received by Northern Rock as official support from the UK banking and government authorities?

A covert money market support operation designed to cover up the difficulties Northern Rock was facing

The Bank of England's role as Lender-Of-Last-resort was activated at a penalty interest rate of 150 basis points above the Bank Rate

The UK government offered to guarantee all existing and new retail deposits, and to most other creditors

The Bank of England provided an additional unlimited facility secured on the collateral of all Northern Rock assets

Question 15

The multi-dimensional risk problem at Northern Rock did not include which one of the combinations of the following?

LPHI Risk; Business Model; Solvency vs. Liquidity: and Deposit Protection

Corporate Governance; Moral Hazard; Role of Government; and Credit Risk

Deposit Protection; Moral Hazard; Business Model; and LPHI Risk

Business Model; Corporate Governance; Moral Hazard; and Deposit Protection

Question 16

According to the G-30 Study, the risk management infrastructure's funding must be

determined by business-unit leaders

determined at the Board level with inputs from business unit leaders

determined at the Board level without influence by business unit leaders

determined by the regulators