PRMIA 8010 Based on Real Exam Environment

Operational Risk Manager (ORM) Exam Questions and Answers

Question 21

If X represents a matrix with ratings transition probabilities for one year, the transition probabilities for 3 years are given by the matrix:

P ^ (-3)

P x P x P

3 [P ^ (-1)]

3 [P]

Question 22

Under the standardized approach to determining operational risk capital, operations risk capital is equal to:

a fixed percentage of the latest gross income of the bank

a varying percentage, determined by the national regulator, of the gross revenue of each of the bank's business lines

15% of the average gross income (considering only the positive years) of the past three years

a fixed percentage (different for each business line) of the gross income of the eight specified business lines, averaged over three years

Question 23

Which loss event type is the failure to timely deliver collateral classified as under the Basel II framework?

Clients, products and business practices

External fraud

Information security

Execution, Delivery & Process Management

Question 24

CreditRisk+, the actuarial model for calculating portfolio credit risk, is based upon:

the exponential distribution

the normal distribution

the Poisson distribution

the log-normal distribution