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Pass Guaranteed 2025 High Pass-Rate PRMIA 8011: Credit and Counterparty Manager (CCRM) Certificate Exam Exam Tutorials

Prep4SureReview made an 8011 Questions for the students so that they don't get confused to prepare for Credit and Counterparty Manager (CCRM) Certificate Exam (8011) certification exam successfully in a short time. Prep4SureReview has designed the real 8011 exam dumps after consulting many professionals and receiving positive feedback. The Credit and Counterparty Manager (CCRM) Certificate Exam (8011) questions have many premium features, so you don't face any hurdles while preparing for Credit and Counterparty Manager (CCRM) Certificate Exam (8011) exam and pass it with good grades.

PRMIA 8011 (Credit and Counterparty Manager (CCRM) Certificate) Certification Exam is designed to test an individual's knowledge and understanding of credit and counterparty risk management. 8011 exam is particularly relevant for professionals working in the financial industry, including banks, insurance companies, investment firms, and regulatory agencies.

PRMIA 8011 (Credit and Counterparty Manager (CCRM) Certificate) Certification Exam is a globally recognized certification exam that tests the knowledge and skills necessary for credit risk management in the financial industry. 8011 Exam is designed for professionals working in the areas of credit risk management, debt and capital markets, finance, and banking. The PRMIA 8011 CCRM Certificate is an accreditation that demonstrates an individual's ability to minimize the credit risk of a financial institution while maximizing the return on investment.

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Quiz 2025 PRMIA High Pass-Rate 8011: Credit and Counterparty Manager (CCRM) Certificate Exam Exam Tutorials

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PRMIA 8011 Exam covers a wide range of topics related to credit risk and counterparty risk, including credit analysis, credit ratings, credit derivatives, credit portfolio management, counterparty risk management, and more. The program provides professionals with a comprehensive understanding of the principles, tools, and techniques used in credit and counterparty risk management. 8011 Exam is designed to test the knowledge and skills of professionals in these areas, and those who pass the exam will receive the PRMIA CCRM Certificate.

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q312-Q317):

NEW QUESTION # 312
Which of the following is not an example of a risk concentration?

A. Material amounts of treasury obligations held as collateral provided by a single counterparty
B. Origination of a large number of SIVs with exposures to the same asset class, where the SIVs are separate legal entities without recourse to the originator
C. Large combined positions in assets affected by different risk factors that are highly correlated
D. Location of a portfolio's assets in a single country but spread across different industries

Answer: A

Explanation:
Choice 'd' represents a risk concentration due to excessive exposure to a single country, even though spread across different industries as the risk factors (economy, exchange rate, interest rate, political risk etc) are the same for all companies in the country.
Choice 'a' represents a risk concentration because even though the risk factors are different, they are highly correlated and therefore effectively behave as one. These undetected correlations proved to be fatal to many financial institutions during the credit crisis.
Choice 'b' represents a risk concentration as was borne out by the recent credit crisis. Large banks had to take over the obligations of SIVs they had created, even though the SIVs were separate legal entities with no legally enforceable recourse to the originating bank. This had to be done for moral and reputational reasons, and banks had to absorb the losses of these supposedly separate vehicles.
Choice 'c' does not represent a risk concentration, in fact it is not a risk at all because it refers to collateral held, even though the collateral may have been provided by the same counterparty. In this case the risk is to the party providing the collateral (in case the party holding the collateral rehypothecates or sells the collateral and is unable to return it).
Therefore Choice 'c' is the correct answer.
The BCBS document on stress testing provides a very nice articulation of risk concentration, and the relevant text from that document is produced verbatim here: [Risk concentration] may arise along different dimensions: single name concentrations; concentrations in regions or industries; concentrations in single risk factors; concentrations that are based on correlated risk factors that reflect subtler or more situation-specific factors, such as previously undetected correlations betweenmarket and credit risks, as well as between those risks and liquidity risk; concentrations in indirect exposures via posted collateral or hedge positions; concentrations in off-balance sheet exposure, contingent exposure, non-contractual obligations due to reputational reasons.

NEW QUESTION # 313
Which of the following is true in relation to Principal Component Analysis (PCA)?
I. An n x n positive definite square matrix will have n-1 eigenvectors
II. The eigenvalues for a correlation matrix can be derived from the corresponding values for the covariance matrix III. Principal components are uncorrelated to each other IV. PCA is useful as it allows 100% of the variation in a complex system to be explained by the first three principal components

A. III and IV
B. III
C. I, II and IV
D. I and III

Answer: B

Explanation:
An n x n positive definite square matrix will have n eigenvectors, and not n - 1. Therefore statement I is incorrect.
A correlation and covariance matrix are related to each other through the matrix of standard deviations. If the covariance matrix is represented by V, the correlation matrix by C and D is the diagonal matrix of standard deviations, then V = DCD. However, there is no simple relationship between the eigenvalues of the two matrices, and it is not possible to derive the eigenvalues for one given the eigenvalues for the other. Therefore statement II is false.
Principal components are uncorrelated to each other. That is correct, and in fact PCA is useful because of this being so. Statement III is therefore true.
PCA does not explain 100% of the variation in a system with just three components - statement IV is false.
(Remember though that most (though not 100%) of the variation in a system of term structures is explained by the first three components - trend, tilt and curvature).
Thus Choice 'd' is the correct answer.

NEW QUESTION # 314
The daily VaR of an investor's commodity position is $10m. The annual VaR, assuming daily returns are independent, is ~$158m (using the square root of time rule). Which of the following statements are correct?
I. If daily returns are not independent and show mean-reversion, the actual annual VaR will be higher than
$158m.
II. If daily returns are not independent and show mean-reversion, the actual annual VaR will be lower than
$158m.
III. If daily returns are not independent and exhibit trending (autocorrelation), the actual annual VaR will be higher than $158m.
III. If daily returns are not independent and exhibit trending (autocorrelation), the actual annual VaR will be lower than $158m.

A. I and III
B. I and IV
C. II and III
D. II and IV

Answer: C

Explanation:
In the case of mean reversion, the actual VaR would be lower than that estimated using the square root of time rule. This is because gains over a period would be followed by losses so that the price can revert to the mean.
In such cases, the autocorrelation between subsequent periods is effectivelynegative. This means the combined VaR over the periods would be lower.
In the case of positive autocorrelation, the actual VaR would be higher than that estimated using the square root of time rule for exactly the opposite reason than that described for the mean-reverting case.
(Recall that Variance (A + B) = Variance(A) + Variance(B) + 2*Correlation*StdDev(A)*StdDev(B). In cases where correlation is zero, the variance can simply be added together (which is the case for iid observations).
In cases where the correlation is negative, the combined variance (and therefore standard deviation and also VaR) will be lower; and where correlation is positive, the combined variance (and therefore standard deviation and also VaR) will be higher.) Therefore statement II is correct, and so is statement III. Choice 'c' is the correct answer.

NEW QUESTION # 315
Which of the following statements is true in relation to the Supervisory Capital Assessment Program (SCAP):
I. The SCAP is an annual exercise conducted by the Treasury Department to determine the health of key financial institutions in the US economy II. The SCAP was essentially a stress test where the stress scenarios were specified by the regulators III. Capital buffers calculated under the SCAP represented the amount of capital that the institutions covered by SCAP held in excess of Basel II requirements IV. The SCAP focused on both total Tier 1 capital as well as Tier 1 common capital

A. II and IV
B. I, II and IV
C. I and III
D. I and III

Answer: A

Explanation:
In the February of 2009, the Federal Reserve (which is the US central bank system) and other US banking regulators embarked on a simultaneous assessment of the capital held by the 19 largest US bank holding companies. This was an unprecedented exercise of a kind never undertaken before, and was known as the Supervisory Capital Assessment Program (SCAP). The purpose of the exercise was to determine the amount of additional capital (called the 'capital buffer') each of the institutions covered would need to ensure that it would have sufficient capital if the economy weakened more than was then expected. The idea was that these financial institutions would then raise additional capital equal to their respective capital buffers by the fourth quarter of 2009.
Statement I is false on two counts: firstl the SCAP was conducted by the US central bank and other regulators, and not the 'Treasury Department' (the Treasury Department in the US is the equivalent of the Ministry of Finance in may other countries). Second, the SCAP was a one time exercise, and not annual.
Statement II is correct. The regulators prescribed rates of losses on credit assets of different kinds and other macro-economic assumptions, and asked the banks to determine the extent of losses they would need to bear (in addition to calculating them independently too). Therefore the SCAP was a stress test where the scenario was prescribed by the regulators.
Statement III is false. Capital buffer under the SCAP referred to the additional capital the banks would need to have certain ratios of capital, and not 'excess' capital.
Statement IV is correct. The SCAP envisaged two capital targets: a Tier 1 capital ratio in excess of 6% at the end of 2010; and a Tier 1 common capital ratio in excess of 4%. Therefore both the total Tier 1 capital and Tier 1 common capital were targeted.
Therefore Choice 'c' is the correct answer.

NEW QUESTION # 316
Which of the following is true in relation to a Contingency Funding Plan (CFP)?
I. A CFP is like a disaster recovery plan to deal with a liquidity crisis II. A CFP should consider market stress conditions, but failures of payment systems are not relevant as they fall under the remit of operational risk III. Reputational damage may result if the market finds out that a firm has had to execute its CFP IV. Sources of emergency funding considered in the CFP should include the role of the central bank as the lender of last resort

A. I and III
B. I, II and III
C. II and IV
D. IV

Answer: A

Explanation:
A CFP is indeed a disaster recovery plan to deal with a liquidity crisis. Therefore statement I is correct.
A CFP should consider market stress conditions, including wide scale failures of payment and settlement systems. Statement II is not correct.
It is true that reputational damage may result if a firm has to activate its CFP - therefore the plan should consider internal and external communications, the timing of information release and the groups within the firm who need to know about the implementation of the plan. Reputational damage can only make any existing liquidity problems worse. Statement III is correct.
Sources of emergency funding should not include funding from the central bank - unless as part of a regular lending facility. Its role as a lender of last resort can not be considered in a CFP. Statement IV is incorrect.
Therefore only statements I and III are correct.

NEW QUESTION # 317
......

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