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PRMIA 8004 Exam Overview:
| Certification Vendor: | Professional Risk Managers' International Association (PRMIA) |
| Exam Name: | PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics |
| Exam Number: | 8004 |
| Exam Format: | Multiple choice, Case study based questions |
| Certificate Validity Period: | PRM designation sustainable with continued membership; certificate validity linked to PRM status, not separate expiry |
| Related Certifications: | PRM (Professional Risk Manager) Designation |
| Available Languages: | English |
| Exam Duration: | Usually part of PRM Exam 2 structure, ~240 total for exam 2 (individual session details vary by test form) |
| Real Exam Qty: | 110 multiple-choice questions (varies slightly by test version) :contentReference[oaicite:1]{index=1} |
| Exam Price: | See PRMIA official fee schedule (varies by membership status; official site required) :contentReference[oaicite:2]{index=2} |
| Passing Score: | 60% (PRM exam standard) :contentReference[oaicite:0]{index=0} |
| Sample Questions: | PRMIA 8004 Sample Questions |
| Exam Way: | Computer-based testing administered through PRMIA testing windows / partner test centers; case studies integrated within multiple-choice format |
| Pre Condition: | Must be enrolled in or progressing toward the PRM designation program; detailed prerequisites and eligibility provided by PRMIA candidate guidebook or official site :contentReference[oaicite:3]{index=3} |
| Official Syllabus URL: | https://www.prmia.org/Public/Public/PRM/Case_Studies_and_Standards.aspx |
PRMIA 8004 Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Standards & Practices | - Bylaws of Professional Risk Managers' International Association, PRMIA - Group of Thirty Best Practices, Global Derivatives Study Group - Standards of Best Practice, Conduct and Ethics, PRMIA Ethics Committee - Principles of Good Governance Principles, PRMIA |
| Case Studies | - WorldCom - Metallgesellschaft - Bankers Trust - Operational Resilience at TSB - Long Term Capital Management (LTCM) - Northern Rock - Lehman Brothers - Washington Mutual (Wamu) - Barings - FTX - Orange County - National Australia Bank (NAB) - FX Options - Fannie Mae and Freddie Mac - American Insurance Group (AIG) - Silicon Valley Bank |
PRMIA PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics Sample Questions:
1. Barings failed to recognize that Nick Leeson's losses were increasing because:
A) Leeson hid his trades in a suspense account
B) The margin report sent to London did not show the true margin needs
C) Leeson ran the front office
D) The London office did not ask for any reports
2. The hedging strategy employed by MG Refining & Marketing has been called:
A) Nothing because MG Refining & Marketing did not hedge its position
B) A differential hedge
C) A stacked hedge
D) Dynamic hedging
3. Employees shall be remunerated adequately for the roles that they perform, where 'adequately' is defined
A) using the risk reward profile for each business line in the organization
B) as commensurate with policies to attract and retain high income / revenue earners
C) as being the market norm for similarly situated personnel in competitive organizations
D) using external references and benchmarks, and in a framework which is consistent with the type of risk-taking behavior expected of employees
4. 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
A) I only
B) All of these are expected of the Risk Management Infrastructure
C) I, III and IV only
D) I and III only
5. The Chair, Vice Chair, Secretary and Treasurer of the PRMIA Board of Directors are elected by:
A) All PRMIA Fellow Members
B) The Regional Directors
C) The Blue Ribbon Advisory Panel
D) A two-thirds affirmative vote of all members
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: C | Question # 3 Answer: D | Question # 4 Answer: C | Question # 5 Answer: B |
By Philipppa
