8011 RELATED CONTENT - 8011 EXAM OBJECTIVES

8011 Related Content - 8011 Exam Objectives

8011 Related Content - 8011 Exam Objectives

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2025 8011 Related Content | Pass-Sure 8011 Exam Objectives: Credit and Counterparty Manager (CCRM) Certificate Exam

PRMIA certification can be used in different IT Company and it will be your access to the IT elites. But you may find that the 8011 study materials are difficult for you. You need much time to prepare and the cost of the 8011 Practice Exam is high, you wonder it will be a great loss for you when fail the exam. It will be bad thing. ExamsLabs will help you to reduce the loss and save the money and time for you.

PRMIA 8011 (Credit and Counterparty Manager (CCRM) Certificate) Certification Exam is an important certification for professionals working in the credit risk and counterparty risk management space. 8011 exam is designed to test the candidate's knowledge and expertise in credit risk and counterparty risk management, and passing the exam is a sign of excellence in this field. Credit and Counterparty Manager (CCRM) Certificate Exam certification is recognized globally and can help professionals advance their careers and open up new opportunities in the financial services industry.

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q193-Q198):

NEW QUESTION # 193
Which of the following measures can be used to reduce settlement risks:

  • A. increasing the timing differences between the two legs of the transaction
  • B. all of the above
  • C. escrow arrangements using a central clearing house
  • D. providing for physical delivery instead of netted cash settlements

Answer: D

Explanation:
increasing the timing differences between the two legs of the transaction will increase settlement risk and not reduce it. Using escrow arrangements, such as central clearing houses to settle transactions (eg the DTCC in the United States) reduces settlement risk. Cash settlements based on netting arrangements reduce settlement risk, while physical delivery combined with gross cash payments increase it.
Therefore Choice 'a' is the correct answer.


NEW QUESTION # 194
Which of the following statements is true in relation to collateral management?
I. A collateral management system need not consider the failure by counterparties to returncollateral when due II. The extent to which counterparties may have rehypothecated collateral is not a consideration for a collateral management system III. Cash is an acceptable substitute for any type of collateral required to be posted IV. Haircuts do not apply to treasury issued instruments posted as collateral

  • A. II and III
  • B. I, II and III
  • C. I, II, III and IV
  • D. None of the statements is true

Answer: D

Explanation:
Strong management of collateral, both receivable and payable, is emerging as an area requiring significant investment by financial institutions and asset managers in IT infrastructures and business processes. A bank needs to make collateral calls daily, based upon the P&L of the previous day, and likewise receives collateral calls from its counterparties. Just like cash, a bank needs to make sure that it does not run out of collateral to post when a call is received. Interestingly, based upon the agreements between banks and their mutual understanding, only certain types of instruments often qualify as valid collateral - and in such cases even cash is not acceptable if the right type of bond or other agreed security is not available to post. The operational challenges of managing collateral increase manifold due to 'rehypothecation', ie when collateral received from one counterparty gets posted out as collateral where it is due. In such cases, the bank should have the mechanisms to receive the right assets back in a timely way in case rehypothecated assets are to be returned.
The systems should be able to deal with delays, failures without impacting the ability of the bank to post collateral as needed. All of this requires major investments in IT and processes.
Statement I is not true as a bank is bound to post collateral to third parties when needed regardless of the failure of its counterparties to post collateral to it when owed. In the markets, failures by counterparties can and do happen, and a collateral management system needs to account for and keep a buffer for the fact that some collateral when due will not be received.
Statement II is not true as rehypothecation by counterparties of collateral posted increases the chances of the collateral not being received in time. The system should consider the need for liquidity to generate assets that can be posted as collateral when others have failed to return the collateral in a timely way.
Statement III is not correct as cash may not be acceptable to counterparties as collateral. From a practical point of view, they may not have the infrastructure to receive and account for cash as collateral. A Swiss bank, for example, may have an 'account' to receive US t-bills as collateral but may not even have a US dollar account to receive cash. Even if it did, the volumes of transactions going back and forth may make tracking and reconciliations impossible. Thus a bank should always make sure that it has the right type of collateral available to post.
Statement IV is incorrect as well, as treasury issued instruments are also subject to haircuts. Their value also fluctuates in response to changes in yields, and therefore they are subject to haircuts as well.
Thus none of the statements are correct and Choice 'd' is the correct answer.


NEW QUESTION # 195
The CDS rate on a defaultable bond is approximated by which of the following expressions:

  • A. Hazard rate / (1 - Recovery rate)
  • B. Loss given default x Default hazard rate
  • C. Credit spread x Loss given default
  • D. Hazard rate x Recovery rate

Answer: B

Explanation:
The CDS rate is approximated by the [Loss given default x Default hazard rate]. Thus Choice 'b' is the correct answer.
Note that this is also equal to the credit spread on the reference bond over the risk free rate. Therefore credit spreads and CDS rates are generally the same. Also, 'loss given default' is nothing but (1 - Recovery rate).
This can be substituted in the formula for the credit spread to get an alternative expression that directly refers to the recovery rate. Therefore all other choices are incorrect.


NEW QUESTION # 196
The estimate of historical VaR at 99% confidence based on a set of data with 100 observations will end up being:

  • A. the extrapolated returns of the last 1.64 observations
  • B. the weighted average of the top 2.33 observations
  • C. None of the above
  • D. the worst single observation in the data set

Answer: D

Explanation:
The VaR in this case will be the top quintile of observations. In this case, since there are exactly 100 observations, this would mean the worst return would become the VaR. Therefore Choice 'b' is the correct answer. Choice 'a' and Choice 'c' make no sense. This highlights that at higher confidence levels, fewer and fewer observations impact the VaR if we are using historical simulation based VaR.


NEW QUESTION # 197
Once the frequency and severity distributions for loss events have been determined, which of the following is an accurate description of the process to determine a full loss distribution foroperational risk?

  • A. The frequency distribution alone forms the basis for the loss distribution for operational risk
  • B. A firm wide operational risk distribution is set to be equal to the product of the frequency and severity distributions
  • C. A firm wide operational risk distribution is generated using Monte Carlo simulations
  • D. A firm wide operational risk distribution is generated by adding together the frequency and severity distributions

Answer: C

Explanation:
Once the frequency distribution has been determined (for example, using the binomial, Poisson or the negative binomial distributions) and the severity distribution has also been determined (for example, using the lognormal, gamma or other functions), the loss distribution can be produced by a Monte Carlo simulation using successive drawings from each of these two distributions. It is assumed that the severity and frequency are independent of each other. The resulting distribution gives a distribution showing the losses for operational risk, from which there Op Risk VaR can be determined using the appropriate percentile.Therefore Choice 'b' is the correct answer.


NEW QUESTION # 198
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In this way, the PRMIA 8011 certified professionals can not only validate their skills and knowledge level but also put their careers on the right track. By doing this you can achieve your career objectives. To avail of all these benefits you need to pass the Credit and Counterparty Manager (CCRM) Certificate Exam (8011) exam which is a difficult exam that demands firm commitment and complete PRMIA 8011 exam questions preparation.

8011 Exam Objectives: https://www.examslabs.com/PRMIA/PRMIA-Certification/best-8011-exam-dumps.html

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