ACTUAL PRMIA 8020 EXAM QUESTIONS AND ANSWERS

Actual PRMIA 8020 Exam Questions and Answers

Actual PRMIA 8020 Exam Questions and Answers

Blog Article

Tags: Examcollection 8020 Questions Answers, 8020 Test Dump, 8020 Exam Success, Exam 8020 Course, Latest 8020 Dumps Ppt

It is estimated conservatively that the passing rate of the exam is over 98 percent with our 8020 study materials as well as considerate services. We not only provide all candidates with high pass rate study materials, but also provide them with good service. The thoughtfulness of our 8020 Study Materials services is insuperable. What we do surly contribute to the success of 8020 practice materials.

When we update the 8020 preparation questions, we will take into account changes in society, and we will also draw user feedback. If you have any thoughts and opinions in using our 8020 study materials, you can tell us. We hope to grow with you and the continuous improvement of 8020 training engine is to give you the best quality experience. And you can get the according 8020 certification as well.

>> Examcollection 8020 Questions Answers <<

8020 Test Dump | 8020 Exam Success

The language which is easy to be understood and simple, 8020 exam questions are suitable for any learners no matter he or she is a student or the person who have worked for many years with profound experiences. So it is convenient for the learners to master the 8020 Guide Torrent and pass the exam in a short time. The amount of the examinee is large. For the office workers, they are both busy in their job and their family life; for the students, they possibly have to learn or do other things.

PRMIA ORM Certificate - 2023 Update Sample Questions (Q14-Q19):

NEW QUESTION # 14
Risk Sensitive pricing is required for several good reasons. Which one of the following is not relevant to the Management's evaluation of the correct approach to Risk Sensitive pricing?

  • A. To avoid the build-up of a skewed quality property portfolio.
  • B. To link personal targets to risk-adjusted return requirements would reinforce the desired risk aware, culture.
  • C. To ensure the income targets can be met or exceeded.
  • D. To adequately reward the investors for the capital they gave us to put at risk.

Answer: C

Explanation:
Risk-sensitive pricing ensures that financial institutions and businesses properly account for risk in their pricing strategies to maintain stability and sustainability. PRMIA's Risk Pricing and Capital Adequacy Guidelines define the importance of risk-sensitive pricing in ensuring fair compensation for risk exposure and avoiding risk concentration issues.
Step 1: Why Risk-Sensitive Pricing Is Important
Aligns risk with return: Pricing should be designed to reflect the underlying risk and return trade-off.
Protects investors: Investors expect compensation for capital at risk (Option A is correct).
Reinforces risk-aware culture: PRMIA promotes linking incentives to risk-adjusted returns (Option B is correct).
Prevents adverse selection: Proper risk pricing prevents low-quality assets from accumulating (Option C is correct).
Step 2: Why Option D Is Incorrect
Income targets are business-driven, not risk-driven.
Risk-sensitive pricing aims to balance risk and reward, not just maximize revenue.
PRMIA discourages profit-seeking behavior at the expense of risk considerations.
PRMIA Risk Reference Used:
PRMIA Risk Pricing Guidelines - Defines the principles of risk-sensitive pricing.
PRMIA Risk-Adjusted Return Standards - Stresses linking incentives to risk-aware decisions.
PRMIA Capital Adequacy Framework - Highlights the role of risk-sensitive pricing in portfolio management.
Final Conclusion:
Risk-sensitive pricing is designed to align returns with risk exposure, not simply to meet or exceed income targets, making Option D the correct answer.


NEW QUESTION # 15
The acronym ESG can stand for:

  • A. Extra Social Governance.
  • B. Environmental. Social and corporate Governance.
  • C. Enhanced Social Governance.
  • D. Environmental. Strategy, and corporate Governance.

Answer: B

Explanation:
Step 1: Definition of ESG
ESG (Environmental, Social, and Corporate Governance) refers to the three core factors used to evaluate a company's sustainability and ethical impact.
ESG is now a key part of risk management, influencing investment decisions, regulatory compliance, and corporate strategy.
Step 2: Breakdown of ESG Components
Environmental (E): Climate change, carbon emissions, resource management.
Social (S): Diversity & inclusion, labor rights, community engagement.
Governance (G): Board structure, executive pay, corporate ethics.
Step 3: Why the Other Options Are Incorrect
Option A ("Environmental, Strategy, and Corporate Governance")
Incorrect because Strategy is not part of ESG.
Option C ("Enhanced Social Governance")
Incorrect because ESG covers more than just social governance.
Option D ("Extra Social Governance")
Incorrect as it does not align with the recognized ESG definition.
PRMIA Risk Reference Used:
PRMIA ESG Risk Management Guidelines - Defines ESG factors as Environmental, Social, and Governance.
PRI (Principles for Responsible Investment) - Aligns ESG with financial risk management.


NEW QUESTION # 16
Which of the following is not an action available to management and the governing body to align the strategy with Risk Capacity.

  • A. Improve retained earnings - by increasing net income or reducing dividends in order to increase risk capacity.
  • B. Reduce retained earning - by increasing dividends in order to return funds to investors and improve reputation.
  • C. Reduce scale of risks - shrink balance sheet or activity levels.
  • D. Improve quality of risks - pursue lower rewarding risks with better prospects.

Answer: B

Explanation:
Step 1: Aligning Strategy with Risk Capacity
Risk capacity is the maximum level of risk a firm can bear based on financial resources, earnings, and capital structure.
Management can adjust risk capacity by modifying risk exposure, balance sheet size, or earnings retention.
Step 2: Why Option C Is Incorrect
Increasing dividends reduces retained earnings, which lowers capital reserves and reduces risk capacity.
Firms seeking to improve risk capacity should retain earnings, not distribute them.
Step 3: Why the Other Options Are Correct
Option A ("Reduce scale of risks") → Correct as reducing balance sheet size lowers risk exposure.
Option B ("Improve quality of risks") → Correct as taking on lower-risk assets improves stability.
Option D ("Improve retained earnings") → Correct as more capital increases risk capacity.
PRMIA Risk Reference Used:
PRMIA Capital Management Framework - Defines risk capacity and earnings retention strategies.
Basel III Capital Standards - Stresses retained earnings as a key factor in risk capacity.
Final Conclusion:
Reducing retained earnings through dividends weakens risk capacity, making Option C the correct answer.


NEW QUESTION # 17
Which of the follow is not included in PRMIA's 10 principles of good governance?

  • A. Clear accountability.
  • B. External validation.
  • C. Risk appetite.
  • D. Holding the PRM Designation.

Answer: D

Explanation:
PRMIA's 10 Principles of Good Governance
PRMIA outlines 10 key principles that focus on risk governance, accountability, transparency, and risk management effectiveness.
These principles ensure strong risk governance structures for financial institutions.
Why Answer B is Correct
Holding the PRM Designation (Professional Risk Manager certification) is NOT a governance principle.
While PRMIA promotes risk education, governance principles focus on organizational risk structures, not individual certifications.
Why Other Answers Are Incorrect
Option
Explanation:
A . Risk appetite.
Correct - PRMIA governance principles include establishing a clear risk appetite.
C . External validation.
Correct - External audits and validation improve governance and risk transparency.
D . Clear accountability.
Correct - Governance principles emphasize clear accountability at all levels of management.
PRMIA Reference for Verification
PRMIA 10 Principles of Good Governance
Basel Corporate Governance Guidelines for Financial Institutions


NEW QUESTION # 18
Risk Capacity for a bank is defined as the:

  • A. Amount of risk the bank wishes to take.
  • B. Amount of risk the regulator sets for the bank.
  • C. Ability to withstand an extreme event and make a profit.
  • D. Ability to suffer an extreme event with an orderly wind up with only shareholders losing money.

Answer: D

Explanation:
Step 1: Definition of Risk Capacity
Risk Capacity refers to the maximum level of risk a bank can absorb while still maintaining orderly operations or, in extreme cases, conducting an orderly resolution.
PRMIA and Basel III define risk capacity as a bank's ability to absorb losses in a crisis without systemic consequences.
Step 2: Why Option D Is Correct
The ultimate test of a bank's risk capacity is whether it can survive an extreme shock without harming depositors or financial markets.
Regulators ensure that a bank can be wound up in an orderly manner so that only shareholders lose money, while depositors and creditors remain protected under resolution planning frameworks.
Step 3: Why the Other Options Are Incorrect
Option A ("Amount of risk the bank wishes to take")
Incorrect because this describes Risk Appetite, not Risk Capacity.
Option B ("Amount of risk the regulator sets for the bank")
Incorrect because regulators set capital requirements, but the bank's actual risk capacity is based on its own capital structure and business model.
Option C ("Ability to withstand an extreme event and make a profit")
Incorrect because risk capacity is about survival, not profit-making during extreme events.
PRMIA Risk Reference Used:
Basel III Risk Capacity Standards - Defines the ability to absorb losses during crises.
PRMIA Risk Governance Framework - Describes how banks should manage risk capacity through capital buffers.
Final Conclusion:
Banks must be able to withstand an extreme event and conduct an orderly wind-up if necessary, ensuring that only shareholders bear the loss, making Option D the correct answer.


NEW QUESTION # 19
......

The BraindumpsPass 8020 PDF file contains the real, valid, and updated PRMIA 8020 exam practice questions. These are the real 8020 exam questions that surely will appear in the upcoming exam and by preparing with them you can easily pass the final exam. The 8020 PDF Questions file is easy to use and install. You can use the 8020 PDF practice questions on your laptop, desktop, tabs, or even on your smartphone and start 8020 exam preparation right now.

8020 Test Dump: https://www.braindumpspass.com/PRMIA/8020-practice-exam-dumps.html

PRMIA Examcollection 8020 Questions Answers Citing an old saying as "Opportunity always favors the ready minds”, 8020 Soft test engine can stimulate the real exam environment, so that you can know the procedure of the exam, and your confidence for the exam will be strengthened, Try the free 8020 exam questions demo right now, Our 8020 dumps pdf almost cover everything you need to overcome the difficulty of the real 8020 exam questions.

When most people think online search, they think Google, 8020 The common parameter under which the contents are divided is given below: Lean Six Sigma overview Define phase Measure phase Analyze phase Improve Exam 8020 Course phase Control phase The first section critically introduces the individuals with the specific course.

Examcollection 8020 Questions Answers Imparts You the Best Knowledge of 8020 Exam

Citing an old saying as "Opportunity always favors the ready minds”, 8020 Soft test engine can stimulate the real exam environment, so that you can know the Examcollection 8020 Questions Answers procedure of the exam, and your confidence for the exam will be strengthened.

Try the free 8020 exam questions demo right now, Our 8020 dumps pdf almost cover everything you need to overcome the difficulty of the real 8020 exam questions.

Many company requests candidates not Latest 8020 Dumps Ppt only have work experiences,but also some professional certificates.

Report this page