STUDY GUIDE 8020 PDF | LATEST 8020 TEST DUMPS

Study Guide 8020 Pdf | Latest 8020 Test Dumps

Study Guide 8020 Pdf | Latest 8020 Test Dumps

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Tags: Study Guide 8020 Pdf, Latest 8020 Test Dumps, 8020 Certification Sample Questions, 8020 Valid Exam Registration, 8020 Latest Dumps Ebook

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Latest 8020 Test Dumps | 8020 Certification Sample Questions

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PRMIA 8020 Exam Syllabus Topics:

TopicDetails
Topic 1
  • Insurance Mitigation: This section of the exam measures the skills of Insurance Risk Managers and covers strategies for transferring risk through insurance and other financial instruments. It focuses on risk transfer mechanisms, policy structuring, and claims management. A key skill measured is assessing risk transfer options through insurance.
Topic 2
  • Risk Assessment: This section of the exam measures the skills of Financial Risk Analysts and covers methodologies for evaluating risks in different domains, including qualitative and quantitative approaches. It focuses on assessing vulnerabilities, threats, and potential impacts on business operations. A key skill measured is conducting risk impact analysis for financial threats.
Topic 3
  • Risk Modeling: This section of the exam measures the skills of Quantitative Risk Analysts and covers mathematical and statistical techniques used to predict risk scenarios. It explores model development, validation, and application in financial and operational risk management. A key skill measured is applying statistical models for risk prediction.
Topic 4
  • Risk Governance: This section of the exam measures the skills of Compliance Officers and covers the policies, structures, and processes that define how organizations oversee risk. It explores regulatory compliance, ethical considerations, and corporate governance frameworks to ensure accountability. A key skill measured is applying governance frameworks to organizational risk policies.
Topic 5
  • Case Studies: This section of the exam measures the skills of Business Risk Consultants and covers real-world applications of risk management concepts. It examines case studies on risk governance, assessment, and mitigation strategies across different industries. A key skill measured is analyzing historical risk events for strategic insights.

PRMIA ORM Certificate - 2023 Update Sample Questions (Q38-Q43):

NEW QUESTION # 38
An example of Credit Risk events with an Operational Risk component included?

  • A. Ponzi Schemes & Rogue Trading.
  • B. Ponzi Schemes.
  • C. Rogue Trading.
  • D. Failure in loan approval process leading to erroneously approved loans.

Answer: A

Explanation:
Step 1: Understanding Credit Risk with an Operational Risk Component
Credit Risk: Risk of loss due to borrower default.
Operational Risk: Risk of loss due to failed internal processes, fraud, or misconduct.
Step 2: Why Option D is Correct
Ponzi Schemes: Fraudulent investment scams disguise credit risk as legitimate lending but collapse when new funds dry up.
Rogue Trading: Traders take unauthorized risks that can lead to credit defaults or massive financial losses.
Step 3: Why the Other Options Are Incorrect
Option A ("Failure in loan approval process") → This is an Operational Risk issue, but does not always create Credit Risk.
Option B ("Ponzi Schemes") → Partially correct, but does not include Rogue Trading, which is also a credit risk-related operational failure.
Option C ("Rogue Trading") → Partially correct, but does not include Ponzi Schemes, which are another key example.
PRMIA Risk Reference Used:
PRMIA Operational Risk Framework - Highlights fraud-based Credit Risk events.
Basel II/III Operational Risk Guidelines - Discusses trading misconduct and credit risk misrepresentation.
Final Conclusion:
Both Ponzi Schemes and Rogue Trading involve credit risk failures caused by operational misconduct, making Option D the correct answer.


NEW QUESTION # 39
What are some of the properties of Bottom-Up KRIs?

  • A. Selected by local management: tied to internal loss events at the legal entity, country, business and / or product level, reported daily, weekly or monthly.
  • B. Seated by senior management: tied to internal loss events at the legal entity, country, business and / or product level, reported.
    daily, weekly or monthly.
  • C. Selected by local management, based on key controls or weaknesses identified by audit reports, reported on quarterly.
  • D. Are not used due to changes in regulations.

Answer: A

Explanation:
Definition of Bottom-Up KRIs
Bottom-Up Key Risk Indicators (KRIs) are identified at the operational level, focusing on localized risks within business units.
They are tied to actual internal loss events and reported frequently (daily, weekly, or monthly) to capture ongoing trends.
Key Properties of Bottom-Up KRIs
Selected by local management → Ensures relevance to specific business areas.
Tied to internal loss events → Helps in tracking risk patterns within specific legal entities, countries, or business units.
Reported frequently → Allows for timely risk detection and mitigation.
Why Answer D is Correct
Bottom-up KRIs focus on localized risk exposure and are monitored frequently to track operational changes.
Why Other Answers Are Incorrect
Option
Explanation:
A . Seated by senior management: tied to internal loss events at the legal entity, country, business, and/or product level, reported daily, weekly, or monthly.
Incorrect - Senior management sets top-down KRIs, while bottom-up KRIs are managed locally.
B . Selected by local management, based on key controls or weaknesses identified by audit reports, reported quarterly.
Incorrect - While audit reports are useful, bottom-up KRIs are based on loss events, not just audit findings. Quarterly reporting is too infrequent.
C . Are not used due to changes in regulations.
Incorrect - Bottom-up KRIs remain essential despite regulatory changes.
PRMIA Reference for Verification
PRMIA Risk Indicator Best Practices
Basel Committee's Risk Measurement and Reporting Guidelines


NEW QUESTION # 40
Which of the following is not the purpose or benefit of a Risk Appetite statement?

  • A. Assists with Strategic discussions.
  • B. Risk management standards and resources are likely to be improved.
  • C. Establishes the maximum risk that the organization can stand.
  • D. The governing body articulates its expectations.

Answer: C

Explanation:
Step 1: Understanding a Risk Appetite Statement
Risk Appetite is the amount of risk an organization is willing to take to achieve its objectives.
A Risk Appetite Statement (RAS) communicates risk tolerance levels and management expectations.
Step 2: Why Option C is Incorrect
Risk Capacity (not Risk Appetite) defines the maximum risk the firm can withstand.
Risk Appetite is about willingness to take risk, not the absolute limit.
Step 3: Why the Other Options Are Correct
Option A ("Improves risk management standards") → Correct, as RAS helps define better risk management.
Option B ("Governing body articulates expectations") → Correct, as RAS is approved by the board.
Option D ("Assists strategic discussions") → Correct, as RAS guides decision-making.
PRMIA Risk Reference Used:
PRMIA Risk Appetite Framework - Differentiates between Risk Appetite and Risk Capacity.
Basel III Governance Principles - Encourages organizations to establish clear risk appetite statements.
Final Conclusion:
Risk Appetite does not establish the maximum risk the firm can withstand-that is Risk Capacity, making Option C the correct answer.


NEW QUESTION # 41
In order for a KRI to be effective it must be:

  • A. Qualitative, Consistent Efficient & Repeatable.
  • B. Quantitative and Qualitative. Consistent. Efficient & Repeatable.
  • C. Quantitative, Repeatable and Efficient.
  • D. Quantitative, Consistent and Comparable. Efficient & Repeatable

Answer: B

Explanation:
Definition of an Effective Key Risk Indicator (KRI)
A KRI is a metric used to identify, measure, and monitor emerging risks.
To be effective, KRIs must be both quantitative and qualitative, allowing for a comprehensive risk view.
Key Characteristics of Effective KRIs
Quantitative - Uses numerical data for trend analysis.
Qualitative - Incorporates expert judgment and scenario-based insights.
Consistent - Maintains uniform definitions across reporting periods.
Efficient & Repeatable - Must be easily measured and consistently reported.
Why Other Answers Are Incorrect
Option
Explanation:
B . Qualitative, Consistent, Efficient & Repeatable.
Incorrect - Excludes quantitative aspects, which are essential for KRIs.
C . Quantitative, Consistent, Comparable, Efficient & Repeatable.
Incorrect - While comparison is useful, qualitative factors are missing, making this answer incomplete.
D . Quantitative, Repeatable and Efficient.
Incorrect - Lacks qualitative insights and consistency as key factors for KRIs.
PRMIA Reference for Verification
PRMIA Risk Indicator Guidelines
Basel Committee's Principles on Risk Data and KRI


NEW QUESTION # 42
Compliance departments traditionally provide policy, oversight, and set the standards for monitoring personal dealing. Which control below would assist in implementing such policies?

  • A. Watch lists of stocks that are not allowed to be traded for a period of time, for instance, ahead of a securities offering that the firm is managing.
  • B. Outsourcing of the policy writing to an accounting firm at least once every 5 years.
  • C. Outsourcing of the policy writing to an accounting firm at least once every 3 years.
  • D. A list of approved suppliers that have been added to the outsourcing policy.

Answer: A

Explanation:
Definition of DORA
The Digital Operational Resilience Act (DORA) is a regulation by the European Union (EU) aimed at strengthening the digital resilience of financial institutions.
It establishes a regulatory framework for managing information and communication technology (ICT) risks in the financial sector.
Key Objectives of DORA
Ensures that financial institutions can withstand, respond to, and recover from cyber threats and ICT-related disruptions.
Introduces standards for risk management, incident reporting, and third-party ICT risk oversight.
Why Other Answers Are Incorrect
Option
Explanation:
A . Domain for Operational Risk Act.
Incorrect - No such regulation exists under this name.
B . Digital Operational Risk Act.
Incorrect - The official name is Digital Operational Resilience Act (DORA).
C . Daily Operational Resilience Act.
Incorrect - DORA is not focused on daily operations but rather long-term digital resilience.
PRMIA Reference for Verification
PRMIA Risk Governance & Digital Resilience Standards
European Commission's Official DORA Regulation


NEW QUESTION # 43
......

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