{"id":26095,"date":"2021-07-06T07:31:47","date_gmt":"2021-07-06T07:31:47","guid":{"rendered":"https:\/\/www.dumpsbase.com\/freedumps\/?p=26095"},"modified":"2021-07-06T07:31:50","modified_gmt":"2021-07-06T07:31:50","slug":"prima-prm-designation-exam-8008-actual-dumps-questions","status":"publish","type":"post","link":"https:\/\/www.dumpsbase.com\/freedumps\/prima-prm-designation-exam-8008-actual-dumps-questions.html","title":{"rendered":"PRIMA PRM Designation Exam 8008 Actual Dumps Questions"},"content":{"rendered":"\n<p>You have read the 8006 exam post before and know that 8008 Exam III: Risk Management Frameworks . Operational Risk . Credit Risk . Counterparty Risk . Market Risk . ALM . FTP &#8211; 2015 Edition exam is one of the four exams for PRM Designation certification. Good news for all PRM Designation candidates, 8008 real dumps with actual questions and answers have been collected by the great team to ensure that you can pass PRIMA 8008 exam in the first attempt.<\/p>\n<h2>We recommend to read PRM Designation <span style=\"background-color: #ff00ff;\">8008 Free Dumps<\/span>\u00a0Online<\/h2>\n<script>\n\t  window.fbAsyncInit = function() {\n\t    FB.init({\n\t      appId            : '622169541470367',\n\t      autoLogAppEvents : true,\n\t      xfbml            : true,\n\t      version          : 'v3.1'\n\t    });\n\t  };\n\t\n\t  (function(d, s, id){\n\t     var js, fjs = d.getElementsByTagName(s)[0];\n\t     if (d.getElementById(id)) {return;}\n\t     js = d.createElement(s); js.id = id;\n\t     js.src = \"https:\/\/connect.facebook.net\/en_US\/sdk.js\";\n\t     fjs.parentNode.insertBefore(js, fjs);\n\t   }(document, 'script', 'facebook-jssdk'));\n\t<\/script><script type=\"text\/javascript\" >\ndocument.addEventListener(\"DOMContentLoaded\", function(event) { \nif(!window.jQuery) alert(\"The important jQuery library is not properly loaded in your site. Your WordPress theme is probably missing the essential wp_head() call. You can switch to another theme and you will see that the plugin works fine and this notice disappears. If you are still not sure what to do you can contact us for help.\");\n});\n<\/script>  \n  \n<div  id=\"watupro_quiz\" class=\"quiz-area single-page-quiz\">\n<p id=\"submittingExam5569\" style=\"display:none;text-align:center;\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.dumpsbase.com\/freedumps\/wp-content\/plugins\/watupro\/img\/loading.gif\" width=\"16\" height=\"16\"><\/p>\n\n<div class=\"watupro-exam-description\" id=\"description-quiz-5569\"><\/div>\n\n<form action=\"\" method=\"post\" class=\"quiz-form\" id=\"quiz-5569\"  enctype=\"multipart\/form-data\" >\n<div class='watu-question ' id='question-1' style=';'><div id='questionWrap-1'  class='   watupro-question-id-184510'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>1. <\/span>Which of the following would not be a part of the principal component structure of the term structure of futures prices?<\/div><input type='hidden' name='question_id[]' id='qID_1' value='184510' \/><input type='hidden' id='answerType184510' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184510[]' id='answer-id-742722' class='answer   answerof-184510 ' value='742722'   \/><label for='answer-id-742722' id='answer-label-742722' class=' answer'><span>Curvature component<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184510[]' id='answer-id-742723' class='answer   answerof-184510 ' value='742723'   \/><label for='answer-id-742723' id='answer-label-742723' class=' answer'><span>Trend component<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184510[]' id='answer-id-742724' class='answer   answerof-184510 ' value='742724'   \/><label for='answer-id-742724' id='answer-label-742724' class=' answer'><span>Parallel component<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184510[]' id='answer-id-742725' class='answer   answerof-184510 ' value='742725'   \/><label for='answer-id-742725' id='answer-label-742725' class=' answer'><span>Tilt component<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-2' style=';'><div id='questionWrap-2'  class='   watupro-question-id-184511'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>2. <\/span>Loss provisioning is intended to cover:<\/div><input type='hidden' name='question_id[]' id='qID_2' value='184511' \/><input type='hidden' id='answerType184511' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184511[]' id='answer-id-742726' class='answer   answerof-184511 ' value='742726'   \/><label for='answer-id-742726' id='answer-label-742726' class=' answer'><span>Unexpected losses<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184511[]' id='answer-id-742727' class='answer   answerof-184511 ' value='742727'   \/><label for='answer-id-742727' id='answer-label-742727' class=' answer'><span>Losses in excess of unexpected losses<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184511[]' id='answer-id-742728' class='answer   answerof-184511 ' value='742728'   \/><label for='answer-id-742728' id='answer-label-742728' class=' answer'><span>Both expected and unexpected losses<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184511[]' id='answer-id-742729' class='answer   answerof-184511 ' value='742729'   \/><label for='answer-id-742729' id='answer-label-742729' class=' answer'><span>Expected losses<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-3' style=';'><div id='questionWrap-3'  class='   watupro-question-id-184512'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>3. <\/span>For a security with a daily standard deviation of 2%, calculate the 10-day VaR at the 95% confidence level. Assume expected daily returns to be nil.<\/div><input type='hidden' name='question_id[]' id='qID_3' value='184512' \/><input type='hidden' id='answerType184512' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184512[]' id='answer-id-742730' class='answer   answerof-184512 ' value='742730'   \/><label for='answer-id-742730' id='answer-label-742730' class=' answer'><span>0.02<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184512[]' id='answer-id-742731' class='answer   answerof-184512 ' value='742731'   \/><label for='answer-id-742731' id='answer-label-742731' class=' answer'><span>0.104<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184512[]' id='answer-id-742732' class='answer   answerof-184512 ' value='742732'   \/><label for='answer-id-742732' id='answer-label-742732' class=' answer'><span>0.1471<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184512[]' id='answer-id-742733' class='answer   answerof-184512 ' value='742733'   \/><label for='answer-id-742733' id='answer-label-742733' class=' answer'><span>None of the above.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-4' style=';'><div id='questionWrap-4'  class='   watupro-question-id-184513'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>4. <\/span>If and are the expected rate of return and volatility of an asset whose prices are log-normally distributed, and a random drawing from a standard normal distribution, we can simulate the asset's returns using the expressions:<\/div><input type='hidden' name='question_id[]' id='qID_4' value='184513' \/><input type='hidden' id='answerType184513' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184513[]' id='answer-id-742734' class='answer   answerof-184513 ' value='742734'   \/><label for='answer-id-742734' id='answer-label-742734' class=' answer'><span>- + .<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184513[]' id='answer-id-742735' class='answer   answerof-184513 ' value='742735'   \/><label for='answer-id-742735' id='answer-label-742735' class=' answer'><span>+ .<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184513[]' id='answer-id-742736' class='answer   answerof-184513 ' value='742736'   \/><label for='answer-id-742736' id='answer-label-742736' class=' answer'><span>\/ .<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184513[]' id='answer-id-742737' class='answer   answerof-184513 ' value='742737'   \/><label for='answer-id-742737' id='answer-label-742737' class=' answer'><span>- .<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-5' style=';'><div id='questionWrap-5'  class='   watupro-question-id-184514'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>5. <\/span>Which of the following statements is true? <br \/>\r<br>I. It is sufficient to ensure that a parent entity has sufficient excess liquidity to cover a liquidity shortfall for a subsidiary. <br \/>\r<br>II. If a parent entity has a shortfall of liquidity, it can always rely upon any excess liquidity that its foreign subsidiaries might have. <br \/>\r<br>III. Wholesale funding sources for a bank refer to stable sources of funding provided by the central bank. <br \/>\r<br>IV. Funding diversification refers to diversification of both funding sources and funding tenors.<\/div><input type='hidden' name='question_id[]' id='qID_5' value='184514' \/><input type='hidden' id='answerType184514' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184514[]' id='answer-id-742738' class='answer   answerof-184514 ' value='742738'   \/><label for='answer-id-742738' id='answer-label-742738' class=' answer'><span>IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184514[]' id='answer-id-742739' class='answer   answerof-184514 ' value='742739'   \/><label for='answer-id-742739' id='answer-label-742739' class=' answer'><span>III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184514[]' id='answer-id-742740' class='answer   answerof-184514 ' value='742740'   \/><label for='answer-id-742740' id='answer-label-742740' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184514[]' id='answer-id-742741' class='answer   answerof-184514 ' value='742741'   \/><label for='answer-id-742741' id='answer-label-742741' class=' answer'><span>I and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-6' style=';'><div id='questionWrap-6'  class='   watupro-question-id-184515'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>6. <\/span>The loss severity distribution for operational risk loss events is generally modeled by which of the following distributions: <br \/>\r<br>I. the lognormal distribution <br \/>\r<br>II. The gamma density function <br \/>\r<br>III. Generalized hyperbolic distributions <br \/>\r<br>IV. Lognormal mixtures<\/div><input type='hidden' name='question_id[]' id='qID_6' value='184515' \/><input type='hidden' id='answerType184515' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184515[]' id='answer-id-742742' class='answer   answerof-184515 ' value='742742'   \/><label for='answer-id-742742' id='answer-label-742742' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184515[]' id='answer-id-742743' class='answer   answerof-184515 ' value='742743'   \/><label for='answer-id-742743' id='answer-label-742743' class=' answer'><span>I, II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184515[]' id='answer-id-742744' class='answer   answerof-184515 ' value='742744'   \/><label for='answer-id-742744' id='answer-label-742744' class=' answer'><span>I, II, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184515[]' id='answer-id-742745' class='answer   answerof-184515 ' value='742745'   \/><label for='answer-id-742745' id='answer-label-742745' class=' answer'><span>I and III<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-7' style=';'><div id='questionWrap-7'  class='   watupro-question-id-184516'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>7. <\/span>Which of the following cannot be used as an internal credit rating model to assess an individual borrower:<\/div><input type='hidden' name='question_id[]' id='qID_7' value='184516' \/><input type='hidden' id='answerType184516' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184516[]' id='answer-id-742746' class='answer   answerof-184516 ' value='742746'   \/><label for='answer-id-742746' id='answer-label-742746' class=' answer'><span>Distance to default model<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184516[]' id='answer-id-742747' class='answer   answerof-184516 ' value='742747'   \/><label for='answer-id-742747' id='answer-label-742747' class=' answer'><span>Probit model<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184516[]' id='answer-id-742748' class='answer   answerof-184516 ' value='742748'   \/><label for='answer-id-742748' id='answer-label-742748' class=' answer'><span>Logit model<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184516[]' id='answer-id-742749' class='answer   answerof-184516 ' value='742749'   \/><label for='answer-id-742749' id='answer-label-742749' class=' answer'><span>Altman's Z-score<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-8' style=';'><div id='questionWrap-8'  class='   watupro-question-id-184517'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>8. <\/span>If the 1-day VaR of a portfolio is $25m, what is the 10-day VaR for the portfolio?<\/div><input type='hidden' name='question_id[]' id='qID_8' value='184517' \/><input type='hidden' id='answerType184517' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184517[]' id='answer-id-742750' class='answer   answerof-184517 ' value='742750'   \/><label for='answer-id-742750' id='answer-label-742750' class=' answer'><span>$7.906m $79.06m<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184517[]' id='answer-id-742751' class='answer   answerof-184517 ' value='742751'   \/><label for='answer-id-742751' id='answer-label-742751' class=' answer'><span>$250m<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184517[]' id='answer-id-742752' class='answer   answerof-184517 ' value='742752'   \/><label for='answer-id-742752' id='answer-label-742752' class=' answer'><span>Cannot be determined without the confidence level being specified<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-9' style=';'><div id='questionWrap-9'  class='   watupro-question-id-184518'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>9. <\/span>Which of the following statements are true: <br \/>\r<br>I. Top down approaches help focus management attention on the frequency and severity of loss events, while bottom up approaches do not. <br \/>\r<br>II. Top down approaches rely upon high level data while bottom up approaches need firm specific risk data to estimate risk. <br \/>\r<br>III. Scenario analysis can help capture both qualitative and quantitative dimensions of operational risk.<\/div><input type='hidden' name='question_id[]' id='qID_9' value='184518' \/><input type='hidden' id='answerType184518' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184518[]' id='answer-id-742753' class='answer   answerof-184518 ' value='742753'   \/><label for='answer-id-742753' id='answer-label-742753' class=' answer'><span>III only<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184518[]' id='answer-id-742754' class='answer   answerof-184518 ' value='742754'   \/><label for='answer-id-742754' id='answer-label-742754' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184518[]' id='answer-id-742755' class='answer   answerof-184518 ' value='742755'   \/><label for='answer-id-742755' id='answer-label-742755' class=' answer'><span>I only<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184518[]' id='answer-id-742756' class='answer   answerof-184518 ' value='742756'   \/><label for='answer-id-742756' id='answer-label-742756' class=' answer'><span>II only<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-10' style=';'><div id='questionWrap-10'  class='   watupro-question-id-184519'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>10. <\/span>The results of 'desk-level' stress tests cannot be added together to arrive at institution wide estimates because:<\/div><input type='hidden' name='question_id[]' id='qID_10' value='184519' \/><input type='hidden' id='answerType184519' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184519[]' id='answer-id-742757' class='answer   answerof-184519 ' value='742757'   \/><label for='answer-id-742757' id='answer-label-742757' class=' answer'><span>Desk-level stress tests tend to ignore higher level risks that are relevant to the institution but completely outside the control of the individual desks.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184519[]' id='answer-id-742758' class='answer   answerof-184519 ' value='742758'   \/><label for='answer-id-742758' id='answer-label-742758' class=' answer'><span>Desk-level stress tests focus on desk specific risks that may be minor or irrelevant in the larger scheme at the institution level.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184519[]' id='answer-id-742759' class='answer   answerof-184519 ' value='742759'   \/><label for='answer-id-742759' id='answer-label-742759' class=' answer'><span>Desk-level stress tests tend to focus on extreme movements in risk parameters (such as \r\nvolatility) without considering economy wide scenarios that may represent more realistic \r\nand consistent situations for the institution.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184519[]' id='answer-id-742760' class='answer   answerof-184519 ' value='742760'   \/><label for='answer-id-742760' id='answer-label-742760' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-11' style=';'><div id='questionWrap-11'  class='   watupro-question-id-184520'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>11. <\/span>Regulatory arbitrage refers to:<\/div><input type='hidden' name='question_id[]' id='qID_11' value='184520' \/><input type='hidden' id='answerType184520' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184520[]' id='answer-id-742761' class='answer   answerof-184520 ' value='742761'   \/><label for='answer-id-742761' id='answer-label-742761' class=' answer'><span>the practice of transferring business and profits to jurisdictions (such as those in other countries) to avoid or reduce capital adequacy requirements<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184520[]' id='answer-id-742762' class='answer   answerof-184520 ' value='742762'   \/><label for='answer-id-742762' id='answer-label-742762' class=' answer'><span>the practice of structuring a financial institution's business as a bank holding company to arbitrage the differing capital and credit rating requirements for different business lines<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184520[]' id='answer-id-742763' class='answer   answerof-184520 ' value='742763'   \/><label for='answer-id-742763' id='answer-label-742763' class=' answer'><span>the practice of investing and financing decisions being driven by associated regulatory capital requirements as opposed to the true underlying economics of these decisions<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184520[]' id='answer-id-742764' class='answer   answerof-184520 ' value='742764'   \/><label for='answer-id-742764' id='answer-label-742764' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-12' style=';'><div id='questionWrap-12'  class='   watupro-question-id-184521'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>12. <\/span>According to the Basel II standard, which of the following conditions must be satisfied before a bank can use 'mark-to-model' for securities in its trading book? <br \/>\r<br>I. Marking-to-market is not possible <br \/>\r<br>II. Market inputs for the model should be sourced in line with market prices <br \/>\r<br>III. The model should have been created by the front office <br \/>\r<br>IV. The model should be subject to periodic review to determine the accuracy of its performance<\/div><input type='hidden' name='question_id[]' id='qID_12' value='184521' \/><input type='hidden' id='answerType184521' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184521[]' id='answer-id-742765' class='answer   answerof-184521 ' value='742765'   \/><label for='answer-id-742765' id='answer-label-742765' class=' answer'><span>I, II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184521[]' id='answer-id-742766' class='answer   answerof-184521 ' value='742766'   \/><label for='answer-id-742766' id='answer-label-742766' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184521[]' id='answer-id-742767' class='answer   answerof-184521 ' value='742767'   \/><label for='answer-id-742767' id='answer-label-742767' class=' answer'><span>I, II, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184521[]' id='answer-id-742768' class='answer   answerof-184521 ' value='742768'   \/><label for='answer-id-742768' id='answer-label-742768' class=' answer'><span>III and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-13' style=';'><div id='questionWrap-13'  class='   watupro-question-id-184522'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>13. <\/span>For identical mean and variance, which of the following distribution assumptions will provide a higher estimate of VaR at a high level of confidence?<\/div><input type='hidden' name='question_id[]' id='qID_13' value='184522' \/><input type='hidden' id='answerType184522' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184522[]' id='answer-id-742769' class='answer   answerof-184522 ' value='742769'   \/><label for='answer-id-742769' id='answer-label-742769' class=' answer'><span>A distribution with kurtosis = 8<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184522[]' id='answer-id-742770' class='answer   answerof-184522 ' value='742770'   \/><label for='answer-id-742770' id='answer-label-742770' class=' answer'><span>A distribution with kurtosis = 0<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184522[]' id='answer-id-742771' class='answer   answerof-184522 ' value='742771'   \/><label for='answer-id-742771' id='answer-label-742771' class=' answer'><span>A distribution with kurtosis = 2<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184522[]' id='answer-id-742772' class='answer   answerof-184522 ' value='742772'   \/><label for='answer-id-742772' id='answer-label-742772' class=' answer'><span>A distribution with kurtosis = 3<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-14' style=';'><div id='questionWrap-14'  class='   watupro-question-id-184523'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>14. <\/span>A stock's volatility under EWMA is estimated at 3.5% on a day its price is $10. The next day, the price moves to $11. <br \/>\r<br>What is the EWMA estimate of the volatility the next day? Assume the persistence parameter = 0.93.<\/div><input type='hidden' name='question_id[]' id='qID_14' value='184523' \/><input type='hidden' id='answerType184523' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184523[]' id='answer-id-742773' class='answer   answerof-184523 ' value='742773'   \/><label for='answer-id-742773' id='answer-label-742773' class=' answer'><span>0.0421<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184523[]' id='answer-id-742774' class='answer   answerof-184523 ' value='742774'   \/><label for='answer-id-742774' id='answer-label-742774' class=' answer'><span>0.0224<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184523[]' id='answer-id-742775' class='answer   answerof-184523 ' value='742775'   \/><label for='answer-id-742775' id='answer-label-742775' class=' answer'><span>0.0429<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184523[]' id='answer-id-742776' class='answer   answerof-184523 ' value='742776'   \/><label for='answer-id-742776' id='answer-label-742776' class=' answer'><span>0.0018<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-15' style=';'><div id='questionWrap-15'  class='   watupro-question-id-184524'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>15. <\/span>CORRECT TEXT <br \/>\r<br>A Monte Carlo simulation based VaR can be effectively used in which of the following cases:<\/div><input type='hidden' name='question_id[]' id='qID_15' value='184524' \/><input type='hidden' id='answerType184524' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184524[]' id='answer-id-742777' class='answer   answerof-184524 ' value='742777'   \/><label for='answer-id-742777' id='answer-label-742777' class=' answer'><span>When returns data cannot be analytically modeled<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184524[]' id='answer-id-742778' class='answer   answerof-184524 ' value='742778'   \/><label for='answer-id-742778' id='answer-label-742778' class=' answer'><span>When returns are discontinuous or display large jumps<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184524[]' id='answer-id-742779' class='answer   answerof-184524 ' value='742779'   \/><label for='answer-id-742779' id='answer-label-742779' class=' answer'><span>Where analytical methods are too complex to effectively use<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184524[]' id='answer-id-742780' class='answer   answerof-184524 ' value='742780'   \/><label for='answer-id-742780' id='answer-label-742780' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-16' style=';'><div id='questionWrap-16'  class='   watupro-question-id-184525'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>16. <\/span>Which of the following statements are true: <br \/>\r<br>I. The three pillars under Basel II are market risk, credit risk and operational risk. <br \/>\r<br>II. Basel II is an improvement over Basel I by increasing the risk sensitivity of the minimum capital requirements. <br \/>\r<br>III. Basel II encourages disclosure of capital levels and risks<\/div><input type='hidden' name='question_id[]' id='qID_16' value='184525' \/><input type='hidden' id='answerType184525' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184525[]' id='answer-id-742781' class='answer   answerof-184525 ' value='742781'   \/><label for='answer-id-742781' id='answer-label-742781' class=' answer'><span>III only<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184525[]' id='answer-id-742782' class='answer   answerof-184525 ' value='742782'   \/><label for='answer-id-742782' id='answer-label-742782' class=' answer'><span>I only<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184525[]' id='answer-id-742783' class='answer   answerof-184525 ' value='742783'   \/><label for='answer-id-742783' id='answer-label-742783' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184525[]' id='answer-id-742784' class='answer   answerof-184525 ' value='742784'   \/><label for='answer-id-742784' id='answer-label-742784' class=' answer'><span>II and III<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-17' style=';'><div id='questionWrap-17'  class='   watupro-question-id-184526'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>17. <\/span>Which of the following are measures of liquidity risk <br \/>\r<br>I. Liquidity Coverage Ratio <br \/>\r<br>II. Net Stable Funding Ratio <br \/>\r<br>III. Book Value to Share Price <br \/>\r<br>IV. Earnings Per Share<\/div><input type='hidden' name='question_id[]' id='qID_17' value='184526' \/><input type='hidden' id='answerType184526' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184526[]' id='answer-id-742785' class='answer   answerof-184526 ' value='742785'   \/><label for='answer-id-742785' id='answer-label-742785' class=' answer'><span>III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184526[]' id='answer-id-742786' class='answer   answerof-184526 ' value='742786'   \/><label for='answer-id-742786' id='answer-label-742786' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184526[]' id='answer-id-742787' class='answer   answerof-184526 ' value='742787'   \/><label for='answer-id-742787' id='answer-label-742787' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184526[]' id='answer-id-742788' class='answer   answerof-184526 ' value='742788'   \/><label for='answer-id-742788' id='answer-label-742788' class=' answer'><span>I and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-18' style=';'><div id='questionWrap-18'  class='   watupro-question-id-184527'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>18. <\/span>Which of the following is not a credit event under ISDA definitions?<\/div><input type='hidden' name='question_id[]' id='qID_18' value='184527' \/><input type='hidden' id='answerType184527' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184527[]' id='answer-id-742789' class='answer   answerof-184527 ' value='742789'   \/><label for='answer-id-742789' id='answer-label-742789' class=' answer'><span>Restructuring<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184527[]' id='answer-id-742790' class='answer   answerof-184527 ' value='742790'   \/><label for='answer-id-742790' id='answer-label-742790' class=' answer'><span>Obligation accelerations<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184527[]' id='answer-id-742791' class='answer   answerof-184527 ' value='742791'   \/><label for='answer-id-742791' id='answer-label-742791' class=' answer'><span>Rating downgrade<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184527[]' id='answer-id-742792' class='answer   answerof-184527 ' value='742792'   \/><label for='answer-id-742792' id='answer-label-742792' class=' answer'><span>Failure to pay<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-19' style=';'><div id='questionWrap-19'  class='   watupro-question-id-184528'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>19. <\/span>An equity manager holds a portfolio valued at $10m which has a beta of 1.1. He believes the market may see a dip in the coming weeks and wishes to eliminate his market exposure temporarily. Market index futures are available and the current futures notional on these is $50,000 per contract. <br \/>\r<br>Which of the following represents the best strategy for the manager to hedge his risk according to his views?<\/div><input type='hidden' name='question_id[]' id='qID_19' value='184528' \/><input type='hidden' id='answerType184528' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184528[]' id='answer-id-742793' class='answer   answerof-184528 ' value='742793'   \/><label for='answer-id-742793' id='answer-label-742793' class=' answer'><span>Sell 200 futures contracts<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184528[]' id='answer-id-742794' class='answer   answerof-184528 ' value='742794'   \/><label for='answer-id-742794' id='answer-label-742794' class=' answer'><span>Buy 220 futures contracts<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184528[]' id='answer-id-742795' class='answer   answerof-184528 ' value='742795'   \/><label for='answer-id-742795' id='answer-label-742795' class=' answer'><span>Sell 220 futures contracts<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184528[]' id='answer-id-742796' class='answer   answerof-184528 ' value='742796'   \/><label for='answer-id-742796' id='answer-label-742796' class=' answer'><span>Liquidate his portfolio as soon as possible<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-20' style=';'><div id='questionWrap-20'  class='   watupro-question-id-184529'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>20. <\/span>Which of the following best describes Altman's Z-score<\/div><input type='hidden' name='question_id[]' id='qID_20' value='184529' \/><input type='hidden' id='answerType184529' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184529[]' id='answer-id-742797' class='answer   answerof-184529 ' value='742797'   \/><label for='answer-id-742797' id='answer-label-742797' class=' answer'><span>A calculation of default probabilities<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184529[]' id='answer-id-742798' class='answer   answerof-184529 ' value='742798'   \/><label for='answer-id-742798' id='answer-label-742798' class=' answer'><span>A regression of probability of survival against a given set of factors<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184529[]' id='answer-id-742799' class='answer   answerof-184529 ' value='742799'   \/><label for='answer-id-742799' id='answer-label-742799' class=' answer'><span>A numerical computation based upon accounting ratios<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184529[]' id='answer-id-742800' class='answer   answerof-184529 ' value='742800'   \/><label for='answer-id-742800' id='answer-label-742800' class=' answer'><span>A standardized z based upon the normal distribution<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-21' style=';'><div id='questionWrap-21'  class='   watupro-question-id-184530'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>21. <\/span>Which of the following are considered asset based credit enhancements? <br \/>\r<br>I. Collateral <br \/>\r<br>II. Credit default swaps <br \/>\r<br>III. Close out netting arrangements <br \/>\r<br>IV. Cash reserves<\/div><input type='hidden' name='question_id[]' id='qID_21' value='184530' \/><input type='hidden' id='answerType184530' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184530[]' id='answer-id-742801' class='answer   answerof-184530 ' value='742801'   \/><label for='answer-id-742801' id='answer-label-742801' class=' answer'><span>II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184530[]' id='answer-id-742802' class='answer   answerof-184530 ' value='742802'   \/><label for='answer-id-742802' id='answer-label-742802' class=' answer'><span>I, II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184530[]' id='answer-id-742803' class='answer   answerof-184530 ' value='742803'   \/><label for='answer-id-742803' id='answer-label-742803' class=' answer'><span>I and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184530[]' id='answer-id-742804' class='answer   answerof-184530 ' value='742804'   \/><label for='answer-id-742804' id='answer-label-742804' class=' answer'><span>I and III<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-22' style=';'><div id='questionWrap-22'  class='   watupro-question-id-184531'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>22. <\/span>When considering a request for a loan from a retail customer, which of the following factors is relevant for a bank to consider:<\/div><input type='hidden' name='question_id[]' id='qID_22' value='184531' \/><input type='hidden' id='answerType184531' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184531[]' id='answer-id-742805' class='answer   answerof-184531 ' value='742805'   \/><label for='answer-id-742805' id='answer-label-742805' class=' answer'><span>The other retail loans in its portfolio<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184531[]' id='answer-id-742806' class='answer   answerof-184531 ' value='742806'   \/><label for='answer-id-742806' id='answer-label-742806' class=' answer'><span>The credit worthiness of the retail customer<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184531[]' id='answer-id-742807' class='answer   answerof-184531 ' value='742807'   \/><label for='answer-id-742807' id='answer-label-742807' class=' answer'><span>The contribution this new loan would bring to total portfolio risk<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184531[]' id='answer-id-742808' class='answer   answerof-184531 ' value='742808'   \/><label for='answer-id-742808' id='answer-label-742808' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-23' style=';'><div id='questionWrap-23'  class='   watupro-question-id-184532'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>23. <\/span>Which of the following statements is true: <br \/>\r<br>I. When averaging quantiles of two Pareto distributions, the quantiles of the averaged models are equal to the geometric average of the quantiles of the original models based upon the number of data items in each original model. <br \/>\r<br>II. When modeling severity distributions, we can only use distributions which have fewer parameters than the number of datapoints we are modeling from. <br \/>\r<br>III. If an internal loss data based model covers the same risks as a scenario based model, they can can be combined using the weighted average of their parameters. <br \/>\r<br>IV If an internal loss model and a scenario based model address different risks, the models can be combined by taking their sums.<\/div><input type='hidden' name='question_id[]' id='qID_23' value='184532' \/><input type='hidden' id='answerType184532' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184532[]' id='answer-id-742809' class='answer   answerof-184532 ' value='742809'   \/><label for='answer-id-742809' id='answer-label-742809' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184532[]' id='answer-id-742810' class='answer   answerof-184532 ' value='742810'   \/><label for='answer-id-742810' id='answer-label-742810' class=' answer'><span>III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184532[]' id='answer-id-742811' class='answer   answerof-184532 ' value='742811'   \/><label for='answer-id-742811' id='answer-label-742811' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184532[]' id='answer-id-742812' class='answer   answerof-184532 ' value='742812'   \/><label for='answer-id-742812' id='answer-label-742812' class=' answer'><span>All statements are true<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-24' style=';'><div id='questionWrap-24'  class='   watupro-question-id-184533'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>24. <\/span>The largest 10 losses over a 250 day observation period are as follows. Calculate the expected shortfall at a 98% confidence level: <br \/>\r<br>20m <br \/>\r<br>19m <br \/>\r<br>19m <br \/>\r<br>17m <br \/>\r<br>16m <br \/>\r<br>13m <br \/>\r<br>11m <br \/>\r<br>10m <br \/>\r<br>9m <br \/>\r<br>9m<\/div><input type='hidden' name='question_id[]' id='qID_24' value='184533' \/><input type='hidden' id='answerType184533' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184533[]' id='answer-id-742813' class='answer   answerof-184533 ' value='742813'   \/><label for='answer-id-742813' id='answer-label-742813' class=' answer'><span>19.5<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184533[]' id='answer-id-742814' class='answer   answerof-184533 ' value='742814'   \/><label for='answer-id-742814' id='answer-label-742814' class=' answer'><span>14.3<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184533[]' id='answer-id-742815' class='answer   answerof-184533 ' value='742815'   \/><label for='answer-id-742815' id='answer-label-742815' class=' answer'><span>18.2<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184533[]' id='answer-id-742816' class='answer   answerof-184533 ' value='742816'   \/><label for='answer-id-742816' id='answer-label-742816' class=' answer'><span>16<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-25' style=';'><div id='questionWrap-25'  class='   watupro-question-id-184534'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>25. <\/span>Which of the following describes rating transition matrices published by credit rating firms:<\/div><input type='hidden' name='question_id[]' id='qID_25' value='184534' \/><input type='hidden' id='answerType184534' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184534[]' id='answer-id-742817' class='answer   answerof-184534 ' value='742817'   \/><label for='answer-id-742817' id='answer-label-742817' class=' answer'><span>Expected ex-ante frequencies of migration from one credit rating to another over a one year period<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184534[]' id='answer-id-742818' class='answer   answerof-184534 ' value='742818'   \/><label for='answer-id-742818' id='answer-label-742818' class=' answer'><span>Probabilities of default for each credit rating class<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184534[]' id='answer-id-742819' class='answer   answerof-184534 ' value='742819'   \/><label for='answer-id-742819' id='answer-label-742819' class=' answer'><span>Probabilities of ratings transition from one rating to another for a given set of issuers<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184534[]' id='answer-id-742820' class='answer   answerof-184534 ' value='742820'   \/><label for='answer-id-742820' id='answer-label-742820' class=' answer'><span>Realized frequencies of migration from one credit rating to another over a one year period<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-26' style=';'><div id='questionWrap-26'  class='   watupro-question-id-184535'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>26. <\/span>Under the KMV Moody's approach to calculating expecting default frequencies (EDF), firms' default on obligations is likely when:<\/div><input type='hidden' name='question_id[]' id='qID_26' value='184535' \/><input type='hidden' id='answerType184535' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184535[]' id='answer-id-742821' class='answer   answerof-184535 ' value='742821'   \/><label for='answer-id-742821' id='answer-label-742821' class=' answer'><span>expected asset values one year hence are below total liabilities<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184535[]' id='answer-id-742822' class='answer   answerof-184535 ' value='742822'   \/><label for='answer-id-742822' id='answer-label-742822' class=' answer'><span>asset values reach a level below short term debt<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184535[]' id='answer-id-742823' class='answer   answerof-184535 ' value='742823'   \/><label for='answer-id-742823' id='answer-label-742823' class=' answer'><span>asset values reach a level below total liabilities<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184535[]' id='answer-id-742824' class='answer   answerof-184535 ' value='742824'   \/><label for='answer-id-742824' id='answer-label-742824' class=' answer'><span>asset values reach a level between short term debt and total liabilities<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-27' style=';'><div id='questionWrap-27'  class='   watupro-question-id-184536'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>27. <\/span>If the default hazard rate for a company is 10%, and the spread on its bonds over the risk free rate is 800 bps, what is the expected recovery rate?<\/div><input type='hidden' name='question_id[]' id='qID_27' value='184536' \/><input type='hidden' id='answerType184536' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184536[]' id='answer-id-742825' class='answer   answerof-184536 ' value='742825'   \/><label for='answer-id-742825' id='answer-label-742825' class=' answer'><span>40.00%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184536[]' id='answer-id-742826' class='answer   answerof-184536 ' value='742826'   \/><label for='answer-id-742826' id='answer-label-742826' class=' answer'><span>20.00%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184536[]' id='answer-id-742827' class='answer   answerof-184536 ' value='742827'   \/><label for='answer-id-742827' id='answer-label-742827' class=' answer'><span>8.00%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184536[]' id='answer-id-742828' class='answer   answerof-184536 ' value='742828'   \/><label for='answer-id-742828' id='answer-label-742828' class=' answer'><span>0.00%<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-28' style=';'><div id='questionWrap-28'  class='   watupro-question-id-184537'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>28. <\/span>Which of the following are considered counterparty based credit enhancements? <br \/>\r<br>I. Collateral <br \/>\r<br>II. Credit default swaps <br \/>\r<br>III. Close out netting arrangements <br \/>\r<br>IV. Guarantees<\/div><input type='hidden' name='question_id[]' id='qID_28' value='184537' \/><input type='hidden' id='answerType184537' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184537[]' id='answer-id-742829' class='answer   answerof-184537 ' value='742829'   \/><label for='answer-id-742829' id='answer-label-742829' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184537[]' id='answer-id-742830' class='answer   answerof-184537 ' value='742830'   \/><label for='answer-id-742830' id='answer-label-742830' class=' answer'><span>II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184537[]' id='answer-id-742831' class='answer   answerof-184537 ' value='742831'   \/><label for='answer-id-742831' id='answer-label-742831' class=' answer'><span>I, II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184537[]' id='answer-id-742832' class='answer   answerof-184537 ' value='742832'   \/><label for='answer-id-742832' id='answer-label-742832' class=' answer'><span>I and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-29' style=';'><div id='questionWrap-29'  class='   watupro-question-id-184538'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>29. <\/span>The probability of default of a security over a 1 year period is 3%. <br \/>\r<br>What is the probability that it would have defaulted within 6 months?<\/div><input type='hidden' name='question_id[]' id='qID_29' value='184538' \/><input type='hidden' id='answerType184538' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184538[]' id='answer-id-742833' class='answer   answerof-184538 ' value='742833'   \/><label for='answer-id-742833' id='answer-label-742833' class=' answer'><span>98.49%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184538[]' id='answer-id-742834' class='answer   answerof-184538 ' value='742834'   \/><label for='answer-id-742834' id='answer-label-742834' class=' answer'><span>3.00%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184538[]' id='answer-id-742835' class='answer   answerof-184538 ' value='742835'   \/><label for='answer-id-742835' id='answer-label-742835' class=' answer'><span>1.51%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184538[]' id='answer-id-742836' class='answer   answerof-184538 ' value='742836'   \/><label for='answer-id-742836' id='answer-label-742836' class=' answer'><span>17.32%<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-30' style=';'><div id='questionWrap-30'  class='   watupro-question-id-184539'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>30. <\/span>Which of the following best describes economic capital?<\/div><input type='hidden' name='question_id[]' id='qID_30' value='184539' \/><input type='hidden' id='answerType184539' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184539[]' id='answer-id-742837' class='answer   answerof-184539 ' value='742837'   \/><label for='answer-id-742837' id='answer-label-742837' class=' answer'><span>Economic capital is the amount of regulatory capital mandated for financial institutions in the OECD countries<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184539[]' id='answer-id-742838' class='answer   answerof-184539 ' value='742838'   \/><label for='answer-id-742838' id='answer-label-742838' class=' answer'><span>Economic capital is the amount of regulatory capital that minimizes the cost of capital for firm<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184539[]' id='answer-id-742839' class='answer   answerof-184539 ' value='742839'   \/><label for='answer-id-742839' id='answer-label-742839' class=' answer'><span>Economic capital reflects the amount of capital required to maintain a firm's target credit rating<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184539[]' id='answer-id-742840' class='answer   answerof-184539 ' value='742840'   \/><label for='answer-id-742840' id='answer-label-742840' class=' answer'><span>Economic capital is a form of provision for market risk losses should adverse conditions arise<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-31' style=';'><div id='questionWrap-31'  class='   watupro-question-id-184540'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>31. <\/span>Which of the following will be a loss not covered by operational risk as defined under Basel II?<\/div><input type='hidden' name='question_id[]' id='qID_31' value='184540' \/><input type='hidden' id='answerType184540' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184540[]' id='answer-id-742841' class='answer   answerof-184540 ' value='742841'   \/><label for='answer-id-742841' id='answer-label-742841' class=' answer'><span>Earthquakes<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184540[]' id='answer-id-742842' class='answer   answerof-184540 ' value='742842'   \/><label for='answer-id-742842' id='answer-label-742842' class=' answer'><span>Fat finger losses<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184540[]' id='answer-id-742843' class='answer   answerof-184540 ' value='742843'   \/><label for='answer-id-742843' id='answer-label-742843' class=' answer'><span>Systems failure<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184540[]' id='answer-id-742844' class='answer   answerof-184540 ' value='742844'   \/><label for='answer-id-742844' id='answer-label-742844' class=' answer'><span>Strategic planning<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-32' style=';'><div id='questionWrap-32'  class='   watupro-question-id-184541'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>32. <\/span>In respect of operational risk capital calculations, the Basel II accord recommends a confidence level and time horizon of:<\/div><input type='hidden' name='question_id[]' id='qID_32' value='184541' \/><input type='hidden' id='answerType184541' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184541[]' id='answer-id-742845' class='answer   answerof-184541 ' value='742845'   \/><label for='answer-id-742845' id='answer-label-742845' class=' answer'><span>99.9% confidence level over a 10 day time horizon<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184541[]' id='answer-id-742846' class='answer   answerof-184541 ' value='742846'   \/><label for='answer-id-742846' id='answer-label-742846' class=' answer'><span>99% confidence level over a 10 year time horizon<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184541[]' id='answer-id-742847' class='answer   answerof-184541 ' value='742847'   \/><label for='answer-id-742847' id='answer-label-742847' class=' answer'><span>99% confidence level over a 1 year time horizon<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184541[]' id='answer-id-742848' class='answer   answerof-184541 ' value='742848'   \/><label for='answer-id-742848' id='answer-label-742848' class=' answer'><span>99.9% confidence level over a 1 year time horizon<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-33' style=';'><div id='questionWrap-33'  class='   watupro-question-id-184542'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>33. <\/span>Which of the following statements are true: <br \/>\r<br>I. Stress testing, if exhaustive, can replace traditional risk management tools such as value-at-risk (VaR) <br \/>\r<br>II. Stress tests can be particularly useful in identifying risks with new products <br \/>\r<br>III. Stress testing is distinct from a bank's ICAAP carried out periodically <br \/>\r<br>IV. Stress testing is a powerful communication tool that can convey risks to decisionmakers in an organization<\/div><input type='hidden' name='question_id[]' id='qID_33' value='184542' \/><input type='hidden' id='answerType184542' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184542[]' id='answer-id-742849' class='answer   answerof-184542 ' value='742849'   \/><label for='answer-id-742849' id='answer-label-742849' class=' answer'><span>I, II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184542[]' id='answer-id-742850' class='answer   answerof-184542 ' value='742850'   \/><label for='answer-id-742850' id='answer-label-742850' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184542[]' id='answer-id-742851' class='answer   answerof-184542 ' value='742851'   \/><label for='answer-id-742851' id='answer-label-742851' class=' answer'><span>II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184542[]' id='answer-id-742852' class='answer   answerof-184542 ' value='742852'   \/><label for='answer-id-742852' id='answer-label-742852' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-34' style=';'><div id='questionWrap-34'  class='   watupro-question-id-184543'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>34. <\/span>CORRECT TEXT <br \/>\r<br>The standard error of a Monte Carlo simulation is:<\/div><input type='hidden' name='question_id[]' id='qID_34' value='184543' \/><input type='hidden' id='answerType184543' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184543[]' id='answer-id-742853' class='answer   answerof-184543 ' value='742853'   \/><label for='answer-id-742853' id='answer-label-742853' class=' answer'><span>Zero<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184543[]' id='answer-id-742854' class='answer   answerof-184543 ' value='742854'   \/><label for='answer-id-742854' id='answer-label-742854' class=' answer'><span>The same as that for a lognormal distribution<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184543[]' id='answer-id-742855' class='answer   answerof-184543 ' value='742855'   \/><label for='answer-id-742855' id='answer-label-742855' class=' answer'><span>Proportional to the inverse of the square root of the sample size<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184543[]' id='answer-id-742856' class='answer   answerof-184543 ' value='742856'   \/><label for='answer-id-742856' id='answer-label-742856' class=' answer'><span>None of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-35' style=';'><div id='questionWrap-35'  class='   watupro-question-id-184544'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>35. <\/span>Which of the following is not a consideration in determining the liquidity needs of a firm (as opposed to determining the time horizon for liquidity risk)?<\/div><input type='hidden' name='question_id[]' id='qID_35' value='184544' \/><input type='hidden' id='answerType184544' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184544[]' id='answer-id-742857' class='answer   answerof-184544 ' value='742857'   \/><label for='answer-id-742857' id='answer-label-742857' class=' answer'><span>Speed with which new equity can be issued to the owners<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184544[]' id='answer-id-742858' class='answer   answerof-184544 ' value='742858'   \/><label for='answer-id-742858' id='answer-label-742858' class=' answer'><span>Collateral<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184544[]' id='answer-id-742859' class='answer   answerof-184544 ' value='742859'   \/><label for='answer-id-742859' id='answer-label-742859' class=' answer'><span>Off balance sheet items<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184544[]' id='answer-id-742860' class='answer   answerof-184544 ' value='742860'   \/><label for='answer-id-742860' id='answer-label-742860' class=' answer'><span>The firm's business model<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-36' style=';'><div id='questionWrap-36'  class='   watupro-question-id-184545'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>36. <\/span>Changes in which of the following do not affect the expected default frequencies (EDF) under the KMV Moody's approach to credit risk?<\/div><input type='hidden' name='question_id[]' id='qID_36' value='184545' \/><input type='hidden' id='answerType184545' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184545[]' id='answer-id-742861' class='answer   answerof-184545 ' value='742861'   \/><label for='answer-id-742861' id='answer-label-742861' class=' answer'><span>Changes in the debt level<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184545[]' id='answer-id-742862' class='answer   answerof-184545 ' value='742862'   \/><label for='answer-id-742862' id='answer-label-742862' class=' answer'><span>Changes in the risk free rate<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184545[]' id='answer-id-742863' class='answer   answerof-184545 ' value='742863'   \/><label for='answer-id-742863' id='answer-label-742863' class=' answer'><span>Changes in asset volatility<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184545[]' id='answer-id-742864' class='answer   answerof-184545 ' value='742864'   \/><label for='answer-id-742864' id='answer-label-742864' class=' answer'><span>Changes in the firm's market capitalization<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-37' style=';'><div id='questionWrap-37'  class='   watupro-question-id-184546'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>37. <\/span>Which of the following is NOT an approach used to allocate economic capital to underlying business units:<\/div><input type='hidden' name='question_id[]' id='qID_37' value='184546' \/><input type='hidden' id='answerType184546' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184546[]' id='answer-id-742865' class='answer   answerof-184546 ' value='742865'   \/><label for='answer-id-742865' id='answer-label-742865' class=' answer'><span>Stand alone economic capital contributions<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184546[]' id='answer-id-742866' class='answer   answerof-184546 ' value='742866'   \/><label for='answer-id-742866' id='answer-label-742866' class=' answer'><span>Marginal economic capital contributions<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184546[]' id='answer-id-742867' class='answer   answerof-184546 ' value='742867'   \/><label for='answer-id-742867' id='answer-label-742867' class=' answer'><span>Fixed ratio economic capital contributions<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184546[]' id='answer-id-742868' class='answer   answerof-184546 ' value='742868'   \/><label for='answer-id-742868' id='answer-label-742868' class=' answer'><span>Incremental economic capital contributions<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-38' style=';'><div id='questionWrap-38'  class='   watupro-question-id-184547'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>38. <\/span>Which of the following is closest to the description of a 'risk functional'?<\/div><input type='hidden' name='question_id[]' id='qID_38' value='184547' \/><input type='hidden' id='answerType184547' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184547[]' id='answer-id-742869' class='answer   answerof-184547 ' value='742869'   \/><label for='answer-id-742869' id='answer-label-742869' class=' answer'><span>A risk functional is the distribution that models the severity of a risk<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184547[]' id='answer-id-742870' class='answer   answerof-184547 ' value='742870'   \/><label for='answer-id-742870' id='answer-label-742870' class=' answer'><span>A risk functional is a model distribution that is an approximation of the true loss distribution of a risk<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184547[]' id='answer-id-742871' class='answer   answerof-184547 ' value='742871'   \/><label for='answer-id-742871' id='answer-label-742871' class=' answer'><span>Risk functional refers to the Kolmogorov-Smirnov distance<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184547[]' id='answer-id-742872' class='answer   answerof-184547 ' value='742872'   \/><label for='answer-id-742872' id='answer-label-742872' class=' answer'><span>A risk functional assigns a penalty value for the difference between a model distribution and a risk's severity distribution<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-39' style=';'><div id='questionWrap-39'  class='   watupro-question-id-184548'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>39. <\/span>The Basel framework does not permit which of the following Units of Measure (UoM) for operational risk modeling: <br \/>\r<br>I. UoM based on legal entity <br \/>\r<br>II. UoM based on event type <br \/>\r<br>III. UoM based on geography <br \/>\r<br>IV. UoM based on line of business<\/div><input type='hidden' name='question_id[]' id='qID_39' value='184548' \/><input type='hidden' id='answerType184548' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184548[]' id='answer-id-742873' class='answer   answerof-184548 ' value='742873'   \/><label for='answer-id-742873' id='answer-label-742873' class=' answer'><span>I and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184548[]' id='answer-id-742874' class='answer   answerof-184548 ' value='742874'   \/><label for='answer-id-742874' id='answer-label-742874' class=' answer'><span>III only<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184548[]' id='answer-id-742875' class='answer   answerof-184548 ' value='742875'   \/><label for='answer-id-742875' id='answer-label-742875' class=' answer'><span>II only<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184548[]' id='answer-id-742876' class='answer   answerof-184548 ' value='742876'   \/><label for='answer-id-742876' id='answer-label-742876' class=' answer'><span>None of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-40' style=';'><div id='questionWrap-40'  class='   watupro-question-id-184549'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>40. <\/span>Which of the following is not an approach proposed by the Basel II framework to compute <br \/>\r<br>operational risk capital?<\/div><input type='hidden' name='question_id[]' id='qID_40' value='184549' \/><input type='hidden' id='answerType184549' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184549[]' id='answer-id-742877' class='answer   answerof-184549 ' value='742877'   \/><label for='answer-id-742877' id='answer-label-742877' class=' answer'><span>Basic indicator approach<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184549[]' id='answer-id-742878' class='answer   answerof-184549 ' value='742878'   \/><label for='answer-id-742878' id='answer-label-742878' class=' answer'><span>Factor based approach<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184549[]' id='answer-id-742879' class='answer   answerof-184549 ' value='742879'   \/><label for='answer-id-742879' id='answer-label-742879' class=' answer'><span>Standardized approach<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184549[]' id='answer-id-742880' class='answer   answerof-184549 ' value='742880'   \/><label for='answer-id-742880' id='answer-label-742880' class=' answer'><span>Advanced measurement approach<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-41' style=';'><div id='questionWrap-41'  class='   watupro-question-id-184550'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>41. <\/span>Which of the following steps are required for computing the aggregate distribution for a UoM for operational risk once loss frequency and severity curves have been estimated: <br \/>\r<br>I. Simulate number of losses based on the frequency distribution <br \/>\r<br>II. Simulate the dollar value of the losses from the severity distribution <br \/>\r<br>III. Simulate random number from the copula used to model dependence between the UoMs <br \/>\r<br>IV. Compute dependent losses from aggregate distribution curves<\/div><input type='hidden' name='question_id[]' id='qID_41' value='184550' \/><input type='hidden' id='answerType184550' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184550[]' id='answer-id-742881' class='answer   answerof-184550 ' value='742881'   \/><label for='answer-id-742881' id='answer-label-742881' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184550[]' id='answer-id-742882' class='answer   answerof-184550 ' value='742882'   \/><label for='answer-id-742882' id='answer-label-742882' class=' answer'><span>III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184550[]' id='answer-id-742883' class='answer   answerof-184550 ' value='742883'   \/><label for='answer-id-742883' id='answer-label-742883' class=' answer'><span>None of the above<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184550[]' id='answer-id-742884' class='answer   answerof-184550 ' value='742884'   \/><label for='answer-id-742884' id='answer-label-742884' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-42' style=';'><div id='questionWrap-42'  class='   watupro-question-id-184551'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>42. <\/span>Which of the following are valid approaches to leveraging external loss data for modeling operational risks: <br \/>\r<br>I. Both internal and external losses can be fitted with distributions, and a weighted average approach using these distributions is relied upon for capital calculations. <br \/>\r<br>II. External loss data is used to inform scenario modeling. <br \/>\r<br>III. External loss data is combined with internal loss data points, and distributions fitted to the combined data set. <br \/>\r<br>IV. External loss data is used to replace internal loss data points to create a higher quality data set to fit distributions.<\/div><input type='hidden' name='question_id[]' id='qID_42' value='184551' \/><input type='hidden' id='answerType184551' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184551[]' id='answer-id-742885' class='answer   answerof-184551 ' value='742885'   \/><label for='answer-id-742885' id='answer-label-742885' class=' answer'><span>I, II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184551[]' id='answer-id-742886' class='answer   answerof-184551 ' value='742886'   \/><label for='answer-id-742886' id='answer-label-742886' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184551[]' id='answer-id-742887' class='answer   answerof-184551 ' value='742887'   \/><label for='answer-id-742887' id='answer-label-742887' class=' answer'><span>II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184551[]' id='answer-id-742888' class='answer   answerof-184551 ' value='742888'   \/><label for='answer-id-742888' id='answer-label-742888' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-43' style=';'><div id='questionWrap-43'  class='   watupro-question-id-184552'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>43. <\/span>If the duration of a bond yielding 10% is 6 years, the volatility of the underlying interest rates 5% per annum, what is the 10-day VaR at 99% confidence of a bond position comprising just this bond with a value of $10m? Assume there are 250 days in a year.<\/div><input type='hidden' name='question_id[]' id='qID_43' value='184552' \/><input type='hidden' id='answerType184552' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-184552[]' id='answer-id-742889' class='answer   answerof-184552 ' value='742889'   \/><label for='answer-id-742889' id='answer-label-742889' class=' answer'><span>233000<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-184552[]' id='answer-id-742890' class='answer   answerof-184552 ' value='742890'   \/><label for='answer-id-742890' id='answer-label-742890' class=' answer'><span>139800<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-184552[]' id='answer-id-742891' class='answer   answerof-184552 ' value='742891'   \/><label for='answer-id-742891' id='answer-label-742891' class=' answer'><span>984000<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-184552[]' id='answer-id-742892' class='answer   answerof-184552 ' value='742892'   \/><label for='answer-id-742892' id='answer-label-742892' class=' answer'><span>279600<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-44' style=';'><div id='questionWrap-44'  class='   watupro-question-id-184553'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>44. <\/span>Which of the following is a valid approach to determining the magnitude of a shock for a given risk factor as part of a historical stress testing exercise? <br \/>\r<br>I. Determine the maximum peak-to-trough change in the risk factor over the defined period of the historical event <br \/>\r<br>II. Determine the minimum peak-to-trough change in the risk factor over the defined period of the historical event <br \/>\r<br>III. Determine the total change in the risk factor between the start date and the finish date of the event regardless of peaks and troughs in between <br \/>\r<br>IV. Determine the maximum single day change in the risk factor and multiply by the number of days covered by the stress event<\/div><input type='hidden' name='question_id[]' id='qID_44' value='184553' \/><input type='hidden' id='answerType184553' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184553[]' id='answer-id-742893' class='answer   answerof-184553 ' value='742893'   \/><label for='answer-id-742893' id='answer-label-742893' class=' answer'><span>II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184553[]' id='answer-id-742894' class='answer   answerof-184553 ' value='742894'   \/><label for='answer-id-742894' id='answer-label-742894' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184553[]' id='answer-id-742895' class='answer   answerof-184553 ' value='742895'   \/><label for='answer-id-742895' id='answer-label-742895' class=' answer'><span>IV only<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184553[]' id='answer-id-742896' class='answer   answerof-184553 ' value='742896'   \/><label for='answer-id-742896' id='answer-label-742896' class=' answer'><span>I, II and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-45' style=';'><div id='questionWrap-45'  class='   watupro-question-id-184554'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>45. <\/span>Which of the following are valid techniques used when performing stress testing based on hypothetical test scenarios: <br \/>\r<br>I. Modifying the covariance matrix by changing asset correlations <br \/>\r<br>II. Specifying hypothetical shocks <br \/>\r<br>III. Sensitivity analysis based on changes in selected risk factors <br \/>\r<br>IV. Evaluating systemic liquidity risks<\/div><input type='hidden' name='question_id[]' id='qID_45' value='184554' \/><input type='hidden' id='answerType184554' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184554[]' id='answer-id-742897' class='answer   answerof-184554 ' value='742897'   \/><label for='answer-id-742897' id='answer-label-742897' class=' answer'><span>I, II, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184554[]' id='answer-id-742898' class='answer   answerof-184554 ' value='742898'   \/><label for='answer-id-742898' id='answer-label-742898' class=' answer'><span>II, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184554[]' id='answer-id-742899' class='answer   answerof-184554 ' value='742899'   \/><label for='answer-id-742899' id='answer-label-742899' class=' answer'><span>I, II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184554[]' id='answer-id-742900' class='answer   answerof-184554 ' value='742900'   \/><label for='answer-id-742900' id='answer-label-742900' class=' answer'><span>I and II<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-46' style=';'><div id='questionWrap-46'  class='   watupro-question-id-184555'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>46. <\/span>Which of the following need to be assumed to convert a transition probability matrix for a given time period to the transition probability matrix for another length of time: <br \/>\r<br>I. Time invariance <br \/>\r<br>II. Markov property <br \/>\r<br>III. Normal distribution <br \/>\r<br>IV. Zero skewness<\/div><input type='hidden' name='question_id[]' id='qID_46' value='184555' \/><input type='hidden' id='answerType184555' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184555[]' id='answer-id-742901' class='answer   answerof-184555 ' value='742901'   \/><label for='answer-id-742901' id='answer-label-742901' class=' answer'><span>I, II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184555[]' id='answer-id-742902' class='answer   answerof-184555 ' value='742902'   \/><label for='answer-id-742902' id='answer-label-742902' class=' answer'><span>III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184555[]' id='answer-id-742903' class='answer   answerof-184555 ' value='742903'   \/><label for='answer-id-742903' id='answer-label-742903' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184555[]' id='answer-id-742904' class='answer   answerof-184555 ' value='742904'   \/><label for='answer-id-742904' id='answer-label-742904' class=' answer'><span>II and III<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-47' style=';'><div id='questionWrap-47'  class='   watupro-question-id-184556'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>47. <\/span>Which of the following formulae describes Marginal VaR for a portfolio p, where V_i is the value of the i-th asset in the portfolio? (All other notation and symbols have their usual meaning.) <br \/>\r<br>A) <br \/>\r<br><br><img decoding=\"async\" width=56 height=47 src=\"https:\/\/www.dumpsbase.com\/freedumps\/wp-content\/uploads\/2021\/07\/image006-7.jpg\" v:shapes=\"_x0000_i1027\"><br><br \/>\r<br>B) <br \/>\r<br><br><img decoding=\"async\" width=71 height=48 src=\"https:\/\/www.dumpsbase.com\/freedumps\/wp-content\/uploads\/2021\/07\/image008-7.jpg\" v:shapes=\"_x0000_i1028\"><br><br \/>\r<br>C) <br \/>\r<br><br><img decoding=\"async\" width=70 height=48 src=\"https:\/\/www.dumpsbase.com\/freedumps\/wp-content\/uploads\/2021\/07\/image010-7.jpg\" v:shapes=\"_x0000_i1029\"><br><br \/>\r<br>D) <br \/>\r<br>All of the above<\/div><input type='hidden' name='question_id[]' id='qID_47' value='184556' \/><input type='hidden' id='answerType184556' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184556[]' id='answer-id-742905' class='answer   answerof-184556 ' value='742905'   \/><label for='answer-id-742905' id='answer-label-742905' class=' answer'><span>Option A<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184556[]' id='answer-id-742906' class='answer   answerof-184556 ' value='742906'   \/><label for='answer-id-742906' id='answer-label-742906' class=' answer'><span>Option B<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184556[]' id='answer-id-742907' class='answer   answerof-184556 ' value='742907'   \/><label for='answer-id-742907' id='answer-label-742907' class=' answer'><span>Option C<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184556[]' id='answer-id-742908' class='answer   answerof-184556 ' value='742908'   \/><label for='answer-id-742908' id='answer-label-742908' class=' answer'><span>Option D<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-48' style=';'><div id='questionWrap-48'  class='   watupro-question-id-184557'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>48. <\/span>The definition of operational risk per Basel II includes which of the following: <br \/>\r<br>I. Risk of loss resulting from inadequate or failed internal processes, people and systems or from external events <br \/>\r<br>II. Legal risk <br \/>\r<br>III. Strategic risk <br \/>\r<br>IV. Reputational risk<\/div><input type='hidden' name='question_id[]' id='qID_48' value='184557' \/><input type='hidden' id='answerType184557' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184557[]' id='answer-id-742909' class='answer   answerof-184557 ' value='742909'   \/><label for='answer-id-742909' id='answer-label-742909' class=' answer'><span>I, II, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184557[]' id='answer-id-742910' class='answer   answerof-184557 ' value='742910'   \/><label for='answer-id-742910' id='answer-label-742910' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184557[]' id='answer-id-742911' class='answer   answerof-184557 ' value='742911'   \/><label for='answer-id-742911' id='answer-label-742911' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184557[]' id='answer-id-742912' class='answer   answerof-184557 ' value='742912'   \/><label for='answer-id-742912' id='answer-label-742912' class=' answer'><span>I and II<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-49' style=';'><div id='questionWrap-49'  class='   watupro-question-id-184558'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>49. <\/span>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). <br \/>\r<br>Which of the following statements are correct? <br \/>\r<br>I. If daily returns are not independent and show mean-reversion, the actual annual VaR will be higher than $158m. <br \/>\r<br>II. If daily returns are not independent and show mean-reversion, the actual annual VaR will be lower than $158m. <br \/>\r<br>III. If daily returns are not independent and exhibit trending (autocorrelation), the actual annual VaR will be higher than $158m. <br \/>\r<br>IV. If daily returns are not independent and exhibit trending (autocorrelation), the actual annual VaR will be lower than $158m.<\/div><input type='hidden' name='question_id[]' id='qID_49' value='184558' \/><input type='hidden' id='answerType184558' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184558[]' id='answer-id-742913' class='answer   answerof-184558 ' value='742913'   \/><label for='answer-id-742913' id='answer-label-742913' class=' answer'><span>I and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184558[]' id='answer-id-742914' class='answer   answerof-184558 ' value='742914'   \/><label for='answer-id-742914' id='answer-label-742914' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184558[]' id='answer-id-742915' class='answer   answerof-184558 ' value='742915'   \/><label for='answer-id-742915' id='answer-label-742915' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184558[]' id='answer-id-742916' class='answer   answerof-184558 ' value='742916'   \/><label for='answer-id-742916' id='answer-label-742916' class=' answer'><span>II and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-50' style=';'><div id='questionWrap-50'  class='   watupro-question-id-184559'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>50. <\/span>Which of the following is a most complete measure of the liquidity gap facing a firm?<\/div><input type='hidden' name='question_id[]' id='qID_50' value='184559' \/><input type='hidden' id='answerType184559' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184559[]' id='answer-id-742917' class='answer   answerof-184559 ' value='742917'   \/><label for='answer-id-742917' id='answer-label-742917' class=' answer'><span>Residual liquidity gap<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184559[]' id='answer-id-742918' class='answer   answerof-184559 ' value='742918'   \/><label for='answer-id-742918' id='answer-label-742918' class=' answer'><span>Liquidity at Risk<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184559[]' id='answer-id-742919' class='answer   answerof-184559 ' value='742919'   \/><label for='answer-id-742919' id='answer-label-742919' class=' answer'><span>Marginal liquidity gap<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184559[]' id='answer-id-742920' class='answer   answerof-184559 ' value='742920'   \/><label for='answer-id-742920' id='answer-label-742920' class=' answer'><span>Cumulative liquidity gap<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-51' style=';'><div id='questionWrap-51'  class='   watupro-question-id-184560'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>51. <\/span>Which of the following statements is a correct description of the phrase present value of a basis point?<\/div><input type='hidden' name='question_id[]' id='qID_51' value='184560' \/><input type='hidden' id='answerType184560' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184560[]' id='answer-id-742921' class='answer   answerof-184560 ' value='742921'   \/><label for='answer-id-742921' id='answer-label-742921' class=' answer'><span>It refers to the present value impact of 1 basis point move in an interest rate on a fixed income security<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184560[]' id='answer-id-742922' class='answer   answerof-184560 ' value='742922'   \/><label for='answer-id-742922' id='answer-label-742922' class=' answer'><span>It refers to the discounted present value of 1\/100th of 1% of a future cash flow<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184560[]' id='answer-id-742923' class='answer   answerof-184560 ' value='742923'   \/><label for='answer-id-742923' id='answer-label-742923' class=' answer'><span>It is another name for duration<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184560[]' id='answer-id-742924' class='answer   answerof-184560 ' value='742924'   \/><label for='answer-id-742924' id='answer-label-742924' class=' answer'><span>It is the principal component representation of the duration of a bond<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-52' style=';'><div id='questionWrap-52'  class='   watupro-question-id-184561'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>52. <\/span>Calculate the 99% 1-day Value at Risk of a portfolio worth $10m with expected returns of 10% annually and volatility of 20%.<\/div><input type='hidden' name='question_id[]' id='qID_52' value='184561' \/><input type='hidden' id='answerType184561' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184561[]' id='answer-id-742925' class='answer   answerof-184561 ' value='742925'   \/><label for='answer-id-742925' id='answer-label-742925' class=' answer'><span>290218<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184561[]' id='answer-id-742926' class='answer   answerof-184561 ' value='742926'   \/><label for='answer-id-742926' id='answer-label-742926' class=' answer'><span>2326000<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184561[]' id='answer-id-742927' class='answer   answerof-184561 ' value='742927'   \/><label for='answer-id-742927' id='answer-label-742927' class=' answer'><span>126491<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184561[]' id='answer-id-742928' class='answer   answerof-184561 ' value='742928'   \/><label for='answer-id-742928' id='answer-label-742928' class=' answer'><span>294218<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-53' style=';'><div id='questionWrap-53'  class='   watupro-question-id-184562'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>53. <\/span>If E denotes the expected value of a loan portfolio at the end on one year and U the value of the portfolio in the worst case scenario at the 99% confidence level, which of the following expressions correctly describes economic capital required in respect of credit risk?<\/div><input type='hidden' name='question_id[]' id='qID_53' value='184562' \/><input type='hidden' id='answerType184562' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184562[]' id='answer-id-742929' class='answer   answerof-184562 ' value='742929'   \/><label for='answer-id-742929' id='answer-label-742929' class=' answer'><span>E - U<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184562[]' id='answer-id-742930' class='answer   answerof-184562 ' value='742930'   \/><label for='answer-id-742930' id='answer-label-742930' class=' answer'><span>U\/E<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184562[]' id='answer-id-742931' class='answer   answerof-184562 ' value='742931'   \/><label for='answer-id-742931' id='answer-label-742931' class=' answer'><span>U<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184562[]' id='answer-id-742932' class='answer   answerof-184562 ' value='742932'   \/><label for='answer-id-742932' id='answer-label-742932' class=' answer'><span>E<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-54' style=';'><div id='questionWrap-54'  class='   watupro-question-id-184563'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>54. <\/span>Which of the following are valid objectives of a reverse stress test: <br \/>\r<br>I. Ensure that a firm can survive for long enough after risks have materialized for it to either regain market confidence, restructure or be sold, or be closed down in an orderly manner, <br \/>\r<br>II. Discover the vulnerabilities of the current business plan, <br \/>\r<br>III. Better integrate business and capital planning, <br \/>\r<br>IV. Create a 'zero-failure' environment at the systemic level in the financial sector<\/div><input type='hidden' name='question_id[]' id='qID_54' value='184563' \/><input type='hidden' id='answerType184563' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184563[]' id='answer-id-742933' class='answer   answerof-184563 ' value='742933'   \/><label for='answer-id-742933' id='answer-label-742933' class=' answer'><span>I and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184563[]' id='answer-id-742934' class='answer   answerof-184563 ' value='742934'   \/><label for='answer-id-742934' id='answer-label-742934' class=' answer'><span>I, II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184563[]' id='answer-id-742935' class='answer   answerof-184563 ' value='742935'   \/><label for='answer-id-742935' id='answer-label-742935' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184563[]' id='answer-id-742936' class='answer   answerof-184563 ' value='742936'   \/><label for='answer-id-742936' id='answer-label-742936' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-55' style=';'><div id='questionWrap-55'  class='   watupro-question-id-184564'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>55. <\/span>The VaR of a portfolio at the 99% confidence level is $250,000 when mean return is assumed to be zero. If the assumption of zero returns is changed to an assumption of returns of $10,000, what is the revised VaR?<\/div><input type='hidden' name='question_id[]' id='qID_55' value='184564' \/><input type='hidden' id='answerType184564' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184564[]' id='answer-id-742937' class='answer   answerof-184564 ' value='742937'   \/><label for='answer-id-742937' id='answer-label-742937' class=' answer'><span>240000<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184564[]' id='answer-id-742938' class='answer   answerof-184564 ' value='742938'   \/><label for='answer-id-742938' id='answer-label-742938' class=' answer'><span>226740<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184564[]' id='answer-id-742939' class='answer   answerof-184564 ' value='742939'   \/><label for='answer-id-742939' id='answer-label-742939' class=' answer'><span>273260<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184564[]' id='answer-id-742940' class='answer   answerof-184564 ' value='742940'   \/><label for='answer-id-742940' id='answer-label-742940' class=' answer'><span>260000<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-56' style=';'><div id='questionWrap-56'  class='   watupro-question-id-184565'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>56. <\/span>A Bank Holding Company (BHC) is invested in an investment bank and a retail bank. The BHC defaults for certain if either the investment bank or the retail bank defaults. However, the BHC can also default on its own without either the investment bank or the retail bank defaulting. The investment bank and the retail bank's defaults are independent of each other, with a probability of default of 0.05 each. The BHC's probability of default is 0.11. <br \/>\r<br>What is the probability of default of both the BHC and the investment bank? What is the probability of the BHC's default provided both the investment bank and the retail bank survive?<\/div><input type='hidden' name='question_id[]' id='qID_56' value='184565' \/><input type='hidden' id='answerType184565' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184565[]' id='answer-id-742941' class='answer   answerof-184565 ' value='742941'   \/><label for='answer-id-742941' id='answer-label-742941' class=' answer'><span>0.0475 and 0.10<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184565[]' id='answer-id-742942' class='answer   answerof-184565 ' value='742942'   \/><label for='answer-id-742942' id='answer-label-742942' class=' answer'><span>0.11 and 0<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184565[]' id='answer-id-742943' class='answer   answerof-184565 ' value='742943'   \/><label for='answer-id-742943' id='answer-label-742943' class=' answer'><span>0.08 and 0.0475<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184565[]' id='answer-id-742944' class='answer   answerof-184565 ' value='742944'   \/><label for='answer-id-742944' id='answer-label-742944' class=' answer'><span>0.05 and 0.0125<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-57' style=';'><div id='questionWrap-57'  class='   watupro-question-id-184566'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>57. <\/span>When pricing credit risk for an exposure, which of the following is a better measure than the others:<\/div><input type='hidden' name='question_id[]' id='qID_57' value='184566' \/><input type='hidden' id='answerType184566' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184566[]' id='answer-id-742945' class='answer   answerof-184566 ' value='742945'   \/><label for='answer-id-742945' id='answer-label-742945' class=' answer'><span>Expected Exposure (EE)<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184566[]' id='answer-id-742946' class='answer   answerof-184566 ' value='742946'   \/><label for='answer-id-742946' id='answer-label-742946' class=' answer'><span>Notional amount<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184566[]' id='answer-id-742947' class='answer   answerof-184566 ' value='742947'   \/><label for='answer-id-742947' id='answer-label-742947' class=' answer'><span>Potential Future Exposure (PFE)<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184566[]' id='answer-id-742948' class='answer   answerof-184566 ' value='742948'   \/><label for='answer-id-742948' id='answer-label-742948' class=' answer'><span>Mark-to-market<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-58' style=';'><div id='questionWrap-58'  class='   watupro-question-id-184567'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>58. <\/span>Which of the following statements are true: <br \/>\r<br>I. The sum of unexpected losses for individual loans in a portfolio is equal to the total unexpected loss for the portfolio. <br \/>\r<br>II. The sum of unexpected losses for individual loans in a portfolio is less than the total unexpected loss for the portfolio. <br \/>\r<br>III. The sum of unexpected losses for individual loans in a portfolio is greater than the total unexpected loss for the portfolio. <br \/>\r<br>IV. The unexpected loss for the portfolio is driven by the unexpected losses of the individual loans in the portfolio and the default correlation between these loans.<\/div><input type='hidden' name='question_id[]' id='qID_58' value='184567' \/><input type='hidden' id='answerType184567' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184567[]' id='answer-id-742949' class='answer   answerof-184567 ' value='742949'   \/><label for='answer-id-742949' id='answer-label-742949' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184567[]' id='answer-id-742950' class='answer   answerof-184567 ' value='742950'   \/><label for='answer-id-742950' id='answer-label-742950' class=' answer'><span>I, II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184567[]' id='answer-id-742951' class='answer   answerof-184567 ' value='742951'   \/><label for='answer-id-742951' id='answer-label-742951' class=' answer'><span>III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184567[]' id='answer-id-742952' class='answer   answerof-184567 ' value='742952'   \/><label for='answer-id-742952' id='answer-label-742952' class=' answer'><span>II and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-59' style=';'><div id='questionWrap-59'  class='   watupro-question-id-184568'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>59. <\/span>For an equity portfolio valued at V whose beta is, the value at risk at a 99% level of confidence is represented by which of the following expressions? Assume represents the market volatility.<\/div><input type='hidden' name='question_id[]' id='qID_59' value='184568' \/><input type='hidden' id='answerType184568' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184568[]' id='answer-id-742953' class='answer   answerof-184568 ' value='742953'   \/><label for='answer-id-742953' id='answer-label-742953' class=' answer'><span>2.326 x x V x<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184568[]' id='answer-id-742954' class='answer   answerof-184568 ' value='742954'   \/><label for='answer-id-742954' id='answer-label-742954' class=' answer'><span>1.64 x V x \/<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184568[]' id='answer-id-742955' class='answer   answerof-184568 ' value='742955'   \/><label for='answer-id-742955' id='answer-label-742955' class=' answer'><span>1.64 x x V x<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184568[]' id='answer-id-742956' class='answer   answerof-184568 ' value='742956'   \/><label for='answer-id-742956' id='answer-label-742956' class=' answer'><span>2.326 x V x \/<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-60' style=';'><div id='questionWrap-60'  class='   watupro-question-id-184569'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>60. <\/span>There are two bonds in a portfolio, each with a market value of $50m. The probability of default of the two bonds are 0.03 and 0.08 respectively, over a one year horizon. <br \/>\r<br>If the default correlation is 25%, what is the one year expected loss on this portfolio?<\/div><input type='hidden' name='question_id[]' id='qID_60' value='184569' \/><input type='hidden' id='answerType184569' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184569[]' id='answer-id-742957' class='answer   answerof-184569 ' value='742957'   \/><label for='answer-id-742957' id='answer-label-742957' class=' answer'><span>$1.38m<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184569[]' id='answer-id-742958' class='answer   answerof-184569 ' value='742958'   \/><label for='answer-id-742958' id='answer-label-742958' class=' answer'><span>$11m<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184569[]' id='answer-id-742959' class='answer   answerof-184569 ' value='742959'   \/><label for='answer-id-742959' id='answer-label-742959' class=' answer'><span>$5.26m<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184569[]' id='answer-id-742960' class='answer   answerof-184569 ' value='742960'   \/><label for='answer-id-742960' id='answer-label-742960' class=' answer'><span>$5.5mc<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-61' style=';'><div id='questionWrap-61'  class='   watupro-question-id-184570'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>61. <\/span>An assumption of normality when returns data have fat tails leads to: <br \/>\r<br>I. underestimation of VaR at high confidence levels <br \/>\r<br>II. overestimation of VaR at low confidence levels <br \/>\r<br>III. overestimation of VaR at high confidence levels <br \/>\r<br>IV. underestimation of VaR at low confidence levels<\/div><input type='hidden' name='question_id[]' id='qID_61' value='184570' \/><input type='hidden' id='answerType184570' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184570[]' id='answer-id-742961' class='answer   answerof-184570 ' value='742961'   \/><label for='answer-id-742961' id='answer-label-742961' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184570[]' id='answer-id-742962' class='answer   answerof-184570 ' value='742962'   \/><label for='answer-id-742962' id='answer-label-742962' class=' answer'><span>I, II, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184570[]' id='answer-id-742963' class='answer   answerof-184570 ' value='742963'   \/><label for='answer-id-742963' id='answer-label-742963' class=' answer'><span>I, II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184570[]' id='answer-id-742964' class='answer   answerof-184570 ' value='742964'   \/><label for='answer-id-742964' id='answer-label-742964' class=' answer'><span>II, III and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-62' style=';'><div id='questionWrap-62'  class='   watupro-question-id-184571'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>62. <\/span>If an institution has $1000 in assets, and $800 in liabilities, what is the economic capital required to avoid insolvency at a 99% level of confidence? The VaR in respect of the assets at 99% confidence over a one year period is $100.<\/div><input type='hidden' name='question_id[]' id='qID_62' value='184571' \/><input type='hidden' id='answerType184571' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184571[]' id='answer-id-742965' class='answer   answerof-184571 ' value='742965'   \/><label for='answer-id-742965' id='answer-label-742965' class=' answer'><span>200<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184571[]' id='answer-id-742966' class='answer   answerof-184571 ' value='742966'   \/><label for='answer-id-742966' id='answer-label-742966' class=' answer'><span>1000<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184571[]' id='answer-id-742967' class='answer   answerof-184571 ' value='742967'   \/><label for='answer-id-742967' id='answer-label-742967' class=' answer'><span>100<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184571[]' id='answer-id-742968' class='answer   answerof-184571 ' value='742968'   \/><label for='answer-id-742968' id='answer-label-742968' class=' answer'><span>1100<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-63' style=';'><div id='questionWrap-63'  class='   watupro-question-id-184572'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>63. <\/span>The CDS rate on a defaultable bond is approximated by which of the following expressions:<\/div><input type='hidden' name='question_id[]' id='qID_63' value='184572' \/><input type='hidden' id='answerType184572' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184572[]' id='answer-id-742969' class='answer   answerof-184572 ' value='742969'   \/><label for='answer-id-742969' id='answer-label-742969' class=' answer'><span>Hazard rate \/ (1 - Recovery rate)<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184572[]' id='answer-id-742970' class='answer   answerof-184572 ' value='742970'   \/><label for='answer-id-742970' id='answer-label-742970' class=' answer'><span>Loss given default x Default hazard rate<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184572[]' id='answer-id-742971' class='answer   answerof-184572 ' value='742971'   \/><label for='answer-id-742971' id='answer-label-742971' class=' answer'><span>Credit spread x Loss given default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184572[]' id='answer-id-742972' class='answer   answerof-184572 ' value='742972'   \/><label for='answer-id-742972' id='answer-label-742972' class=' answer'><span>Hazard rate x Recovery rate<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-64' style=';'><div id='questionWrap-64'  class='   watupro-question-id-184573'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>64. <\/span>Which of the following measures can be used to reduce settlement risks:<\/div><input type='hidden' name='question_id[]' id='qID_64' value='184573' \/><input type='hidden' id='answerType184573' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184573[]' id='answer-id-742973' class='answer   answerof-184573 ' value='742973'   \/><label for='answer-id-742973' id='answer-label-742973' class=' answer'><span>escrow arrangements using a central clearing house<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184573[]' id='answer-id-742974' class='answer   answerof-184573 ' value='742974'   \/><label for='answer-id-742974' id='answer-label-742974' class=' answer'><span>increasing the timing differences between the two legs of the transaction<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184573[]' id='answer-id-742975' class='answer   answerof-184573 ' value='742975'   \/><label for='answer-id-742975' id='answer-label-742975' class=' answer'><span>providing for physical delivery instead of netted cash settlements<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184573[]' id='answer-id-742976' class='answer   answerof-184573 ' value='742976'   \/><label for='answer-id-742976' id='answer-label-742976' class=' answer'><span>all of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-65' style=';'><div id='questionWrap-65'  class='   watupro-question-id-184574'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>65. <\/span>For a FX forward contract, what would be the worst time for a counterparty to default (in terms of the maximum likely credit exposure)<\/div><input type='hidden' name='question_id[]' id='qID_65' value='184574' \/><input type='hidden' id='answerType184574' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184574[]' id='answer-id-742977' class='answer   answerof-184574 ' value='742977'   \/><label for='answer-id-742977' id='answer-label-742977' class=' answer'><span>At maturity<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184574[]' id='answer-id-742978' class='answer   answerof-184574 ' value='742978'   \/><label for='answer-id-742978' id='answer-label-742978' class=' answer'><span>Roughly three-quarters of the way towards maturity<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184574[]' id='answer-id-742979' class='answer   answerof-184574 ' value='742979'   \/><label for='answer-id-742979' id='answer-label-742979' class=' answer'><span>Indeterminate from the given information<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184574[]' id='answer-id-742980' class='answer   answerof-184574 ' value='742980'   \/><label for='answer-id-742980' id='answer-label-742980' class=' answer'><span>Right after inception<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-66' style=';'><div id='questionWrap-66'  class='   watupro-question-id-184575'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>66. <\/span>Which of the following is the most accurate description of EPE (Expected Positive Exposure):<\/div><input type='hidden' name='question_id[]' id='qID_66' value='184575' \/><input type='hidden' id='answerType184575' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184575[]' id='answer-id-742981' class='answer   answerof-184575 ' value='742981'   \/><label for='answer-id-742981' id='answer-label-742981' class=' answer'><span>The maximum average credit exposure over a period of time<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184575[]' id='answer-id-742982' class='answer   answerof-184575 ' value='742982'   \/><label for='answer-id-742982' id='answer-label-742982' class=' answer'><span>The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184575[]' id='answer-id-742983' class='answer   answerof-184575 ' value='742983'   \/><label for='answer-id-742983' id='answer-label-742983' class=' answer'><span>Weighted average of the future positive expected exposure across a time horizon.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184575[]' id='answer-id-742984' class='answer   answerof-184575 ' value='742984'   \/><label for='answer-id-742984' id='answer-label-742984' class=' answer'><span>The average of the distribution of positive exposures at a specified future date<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-67' style=';'><div id='questionWrap-67'  class='   watupro-question-id-184576'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>67. <\/span>If the odds of default are 1:5, what is the probability of default?<\/div><input type='hidden' name='question_id[]' id='qID_67' value='184576' \/><input type='hidden' id='answerType184576' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184576[]' id='answer-id-742985' class='answer   answerof-184576 ' value='742985'   \/><label for='answer-id-742985' id='answer-label-742985' class=' answer'><span>16.67%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184576[]' id='answer-id-742986' class='answer   answerof-184576 ' value='742986'   \/><label for='answer-id-742986' id='answer-label-742986' class=' answer'><span>20.00%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184576[]' id='answer-id-742987' class='answer   answerof-184576 ' value='742987'   \/><label for='answer-id-742987' id='answer-label-742987' class=' answer'><span>12.00%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184576[]' id='answer-id-742988' class='answer   answerof-184576 ' value='742988'   \/><label for='answer-id-742988' id='answer-label-742988' class=' answer'><span>50.00%<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-68' style=';'><div id='questionWrap-68'  class='   watupro-question-id-184577'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>68. <\/span>Which of the following decisions need to be made as part of laying down a system for calculating VaR: <br \/>\r<br>I. The confidence level and horizon <br \/>\r<br>II. Whether portfolio valuation is based upon a delta-gamma approximation or a full revaluation <br \/>\r<br>III. Whether the VaR is to be disclosed in the quarterly financial statements <br \/>\r<br>IV. Whether a 10 day VaR will be calculated based on 10-day return periods, or for 1-day and scaled to 10 days<\/div><input type='hidden' name='question_id[]' id='qID_68' value='184577' \/><input type='hidden' id='answerType184577' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184577[]' id='answer-id-742989' class='answer   answerof-184577 ' value='742989'   \/><label for='answer-id-742989' id='answer-label-742989' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184577[]' id='answer-id-742990' class='answer   answerof-184577 ' value='742990'   \/><label for='answer-id-742990' id='answer-label-742990' class=' answer'><span>II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184577[]' id='answer-id-742991' class='answer   answerof-184577 ' value='742991'   \/><label for='answer-id-742991' id='answer-label-742991' class=' answer'><span>I, II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184577[]' id='answer-id-742992' class='answer   answerof-184577 ' value='742992'   \/><label for='answer-id-742992' id='answer-label-742992' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-69' style=';'><div id='questionWrap-69'  class='   watupro-question-id-184578'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>69. <\/span>What is the 1-day VaR at the 99% confidence interval for a cash flow of $10m due in 6 months time? The risk free interest rate is 5% per annum and its annual volatility is 15%. Assume a 250 day year.<\/div><input type='hidden' name='question_id[]' id='qID_69' value='184578' \/><input type='hidden' id='answerType184578' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184578[]' id='answer-id-742993' class='answer   answerof-184578 ' value='742993'   \/><label for='answer-id-742993' id='answer-label-742993' class=' answer'><span>5500<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184578[]' id='answer-id-742994' class='answer   answerof-184578 ' value='742994'   \/><label for='answer-id-742994' id='answer-label-742994' class=' answer'><span>1744500<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184578[]' id='answer-id-742995' class='answer   answerof-184578 ' value='742995'   \/><label for='answer-id-742995' id='answer-label-742995' class=' answer'><span>109031<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184578[]' id='answer-id-742996' class='answer   answerof-184578 ' value='742996'   \/><label for='answer-id-742996' id='answer-label-742996' class=' answer'><span>85123<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-70' style=';'><div id='questionWrap-70'  class='   watupro-question-id-184579'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>70. <\/span>The frequency distribution for operational risk loss events can be modeled by which of the following distributions: <br \/>\r<br>I. The binomial distribution <br \/>\r<br>II. The Poisson distribution <br \/>\r<br>III. The negative binomial distribution <br \/>\r<br>IV. The omega distribution<\/div><input type='hidden' name='question_id[]' id='qID_70' value='184579' \/><input type='hidden' id='answerType184579' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184579[]' id='answer-id-742997' class='answer   answerof-184579 ' value='742997'   \/><label for='answer-id-742997' id='answer-label-742997' class=' answer'><span>I, II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184579[]' id='answer-id-742998' class='answer   answerof-184579 ' value='742998'   \/><label for='answer-id-742998' id='answer-label-742998' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184579[]' id='answer-id-742999' class='answer   answerof-184579 ' value='742999'   \/><label for='answer-id-742999' id='answer-label-742999' class=' answer'><span>I, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184579[]' id='answer-id-743000' class='answer   answerof-184579 ' value='743000'   \/><label for='answer-id-743000' id='answer-label-743000' class=' answer'><span>I, II, III and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-71' style=';'><div id='questionWrap-71'  class='   watupro-question-id-184580'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>71. <\/span>Which of the following are considered properties of a 'coherent' risk measure: <br \/>\r<br>I. Monotonicity <br \/>\r<br>II. Homogeneity <br \/>\r<br>III. Translation Invariance <br \/>\r<br>IV. Sub-additivity<\/div><input type='hidden' name='question_id[]' id='qID_71' value='184580' \/><input type='hidden' id='answerType184580' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184580[]' id='answer-id-743001' class='answer   answerof-184580 ' value='743001'   \/><label for='answer-id-743001' id='answer-label-743001' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184580[]' id='answer-id-743002' class='answer   answerof-184580 ' value='743002'   \/><label for='answer-id-743002' id='answer-label-743002' class=' answer'><span>II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184580[]' id='answer-id-743003' class='answer   answerof-184580 ' value='743003'   \/><label for='answer-id-743003' id='answer-label-743003' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184580[]' id='answer-id-743004' class='answer   answerof-184580 ' value='743004'   \/><label for='answer-id-743004' id='answer-label-743004' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-72' style=';'><div id='questionWrap-72'  class='   watupro-question-id-184581'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>72. <\/span>Which of the following statements are true with respect to stress testing: <br \/>\r<br>I. Stress testing results in a dollar estimate of losses <br \/>\r<br>II. The results of stress testing can replace VaR as a measure of risk as they are better grounded in reality <br \/>\r<br>III. Stress testing provides an estimate of losses at a desired level of confidence <br \/>\r<br>IV. Stress testing based on factor shocks can allow modeling extreme events that have not occurred in the past<\/div><input type='hidden' name='question_id[]' id='qID_72' value='184581' \/><input type='hidden' id='answerType184581' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184581[]' id='answer-id-743005' class='answer   answerof-184581 ' value='743005'   \/><label for='answer-id-743005' id='answer-label-743005' class=' answer'><span>I and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184581[]' id='answer-id-743006' class='answer   answerof-184581 ' value='743006'   \/><label for='answer-id-743006' id='answer-label-743006' class=' answer'><span>I, II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184581[]' id='answer-id-743007' class='answer   answerof-184581 ' value='743007'   \/><label for='answer-id-743007' id='answer-label-743007' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184581[]' id='answer-id-743008' class='answer   answerof-184581 ' value='743008'   \/><label for='answer-id-743008' id='answer-label-743008' class=' answer'><span>II, III and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-73' style=';'><div id='questionWrap-73'  class='   watupro-question-id-184582'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>73. <\/span>For a US based investor, what is the 10-day value-at risk at the 95% confidence level of a long spot position of EUR 15m, where the volatility of the underlying exchange rate is 16% annually. The current spot rate for EUR is 1.5. (Assume 250 trading days in a year).<\/div><input type='hidden' name='question_id[]' id='qID_73' value='184582' \/><input type='hidden' id='answerType184582' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184582[]' id='answer-id-743009' class='answer   answerof-184582 ' value='743009'   \/><label for='answer-id-743009' id='answer-label-743009' class=' answer'><span>526400<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184582[]' id='answer-id-743010' class='answer   answerof-184582 ' value='743010'   \/><label for='answer-id-743010' id='answer-label-743010' class=' answer'><span>2632000<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184582[]' id='answer-id-743011' class='answer   answerof-184582 ' value='743011'   \/><label for='answer-id-743011' id='answer-label-743011' class=' answer'><span>1184400<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184582[]' id='answer-id-743012' class='answer   answerof-184582 ' value='743012'   \/><label for='answer-id-743012' id='answer-label-743012' class=' answer'><span>5922000<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-74' style=';'><div id='questionWrap-74'  class='   watupro-question-id-184583'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>74. <\/span>Which of the following credit risk models focuses on default alone and ignores credit migration when assessing credit risk?<\/div><input type='hidden' name='question_id[]' id='qID_74' value='184583' \/><input type='hidden' id='answerType184583' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184583[]' id='answer-id-743013' class='answer   answerof-184583 ' value='743013'   \/><label for='answer-id-743013' id='answer-label-743013' class=' answer'><span>CreditPortfolio View<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184583[]' id='answer-id-743014' class='answer   answerof-184583 ' value='743014'   \/><label for='answer-id-743014' id='answer-label-743014' class=' answer'><span>The contingent claims approach<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184583[]' id='answer-id-743015' class='answer   answerof-184583 ' value='743015'   \/><label for='answer-id-743015' id='answer-label-743015' class=' answer'><span>The CreditMetrics approach<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184583[]' id='answer-id-743016' class='answer   answerof-184583 ' value='743016'   \/><label for='answer-id-743016' id='answer-label-743016' class=' answer'><span>The actuarial approach<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-75' style=';'><div id='questionWrap-75'  class='   watupro-question-id-184584'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>75. <\/span>There are two bonds in a portfolio, each with a market value of $50m. The probability of default of the two bonds are 0.03 and 0.08 respectively, over a one year horizon. <br \/>\r<br>If the probability of the two bonds defaulting simultaneously is 1.4%, what is the default correlation between the two?<\/div><input type='hidden' name='question_id[]' id='qID_75' value='184584' \/><input type='hidden' id='answerType184584' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184584[]' id='answer-id-743017' class='answer   answerof-184584 ' value='743017'   \/><label for='answer-id-743017' id='answer-label-743017' class=' answer'><span>0%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184584[]' id='answer-id-743018' class='answer   answerof-184584 ' value='743018'   \/><label for='answer-id-743018' id='answer-label-743018' class=' answer'><span>100%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184584[]' id='answer-id-743019' class='answer   answerof-184584 ' value='743019'   \/><label for='answer-id-743019' id='answer-label-743019' class=' answer'><span>40%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184584[]' id='answer-id-743020' class='answer   answerof-184584 ' value='743020'   \/><label for='answer-id-743020' id='answer-label-743020' class=' answer'><span>25%<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-76' style=';'><div id='questionWrap-76'  class='   watupro-question-id-184585'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>76. <\/span>Which of the following best describes a 'break clause?<\/div><input type='hidden' name='question_id[]' id='qID_76' value='184585' \/><input type='hidden' id='answerType184585' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184585[]' id='answer-id-743021' class='answer   answerof-184585 ' value='743021'   \/><label for='answer-id-743021' id='answer-label-743021' class=' answer'><span>A break clause gives either party to a transaction the right to terminate the transaction at market price at future date(s)<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184585[]' id='answer-id-743022' class='answer   answerof-184585 ' value='743022'   \/><label for='answer-id-743022' id='answer-label-743022' class=' answer'><span>A break clause determines the process by which amounts due on early termination will be determined<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184585[]' id='answer-id-743023' class='answer   answerof-184585 ' value='743023'   \/><label for='answer-id-743023' id='answer-label-743023' class=' answer'><span>A break clause describes rights and obligations when the derivative contract is broken<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184585[]' id='answer-id-743024' class='answer   answerof-184585 ' value='743024'   \/><label for='answer-id-743024' id='answer-label-743024' class=' answer'><span>A break clause sets out the conditions under which the transaction will be terminated upon non-compliance with the ISDA MA<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-77' style=';'><div id='questionWrap-77'  class='   watupro-question-id-184586'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>77. <\/span>Under the CreditPortfolio View approach to credit risk modeling, which of the following best describes the conditional transition matrix:<\/div><input type='hidden' name='question_id[]' id='qID_77' value='184586' \/><input type='hidden' id='answerType184586' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184586[]' id='answer-id-743025' class='answer   answerof-184586 ' value='743025'   \/><label for='answer-id-743025' id='answer-label-743025' class=' answer'><span>The conditional transition matrix is the unconditional transition matrix adjusted for the state of the economy and other macro economic factors being modeled<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184586[]' id='answer-id-743026' class='answer   answerof-184586 ' value='743026'   \/><label for='answer-id-743026' id='answer-label-743026' class=' answer'><span>The conditional transition matrix is the transition matrix adjusted for the risk horizon being different from that of the transition matrix<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184586[]' id='answer-id-743027' class='answer   answerof-184586 ' value='743027'   \/><label for='answer-id-743027' id='answer-label-743027' class=' answer'><span>The conditional transition matrix is the unconditional transition matrix adjusted for probabilities of defaults<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184586[]' id='answer-id-743028' class='answer   answerof-184586 ' value='743028'   \/><label for='answer-id-743028' id='answer-label-743028' class=' answer'><span>The conditional transition matrix is the transition matrix adjusted for the distribution of the firms' asset returns<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-78' style=';'><div id='questionWrap-78'  class='   watupro-question-id-184587'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>78. <\/span>Which of the following are elements of 'group risk': <br \/>\r<br>I. Market risk <br \/>\r<br>II. Intra-group exposures <br \/>\r<br>III. Reputational contagion <br \/>\r<br>IV. Complex group structures<\/div><input type='hidden' name='question_id[]' id='qID_78' value='184587' \/><input type='hidden' id='answerType184587' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184587[]' id='answer-id-743029' class='answer   answerof-184587 ' value='743029'   \/><label for='answer-id-743029' id='answer-label-743029' class=' answer'><span>II, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184587[]' id='answer-id-743030' class='answer   answerof-184587 ' value='743030'   \/><label for='answer-id-743030' id='answer-label-743030' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184587[]' id='answer-id-743031' class='answer   answerof-184587 ' value='743031'   \/><label for='answer-id-743031' id='answer-label-743031' class=' answer'><span>I and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184587[]' id='answer-id-743032' class='answer   answerof-184587 ' value='743032'   \/><label for='answer-id-743032' id='answer-label-743032' class=' answer'><span>I and II<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-79' style=';'><div id='questionWrap-79'  class='   watupro-question-id-184588'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>79. <\/span>A bank extends a loan of $1m to a home buyer to buy a house currently worth $1.5m, with the house serving as the collateral. The volatility of returns (assumed normally distributed) on house prices in that neighborhood is assessed at 10% annually. The expected probability of default of the home buyer is 5%. <br \/>\r<br>What is the probability that the bank will recover less than the principal advanced on this loan; assuming the probability of the home buyer's default is independent of the value of the house?<\/div><input type='hidden' name='question_id[]' id='qID_79' value='184588' \/><input type='hidden' id='answerType184588' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184588[]' id='answer-id-743033' class='answer   answerof-184588 ' value='743033'   \/><label for='answer-id-743033' id='answer-label-743033' class=' answer'><span>More than 1%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184588[]' id='answer-id-743034' class='answer   answerof-184588 ' value='743034'   \/><label for='answer-id-743034' id='answer-label-743034' class=' answer'><span>Less than 1%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184588[]' id='answer-id-743035' class='answer   answerof-184588 ' value='743035'   \/><label for='answer-id-743035' id='answer-label-743035' class=' answer'><span>More than 5%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184588[]' id='answer-id-743036' class='answer   answerof-184588 ' value='743036'   \/><label for='answer-id-743036' id='answer-label-743036' class=' answer'><span>0<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-80' style=';'><div id='questionWrap-80'  class='   watupro-question-id-184589'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>80. <\/span>When the volatility of the yield for a bond increases, which of the following statements is true:<\/div><input type='hidden' name='question_id[]' id='qID_80' value='184589' \/><input type='hidden' id='answerType184589' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184589[]' id='answer-id-743037' class='answer   answerof-184589 ' value='743037'   \/><label for='answer-id-743037' id='answer-label-743037' class=' answer'><span>The VaR for the bond decreases and its value increases<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184589[]' id='answer-id-743038' class='answer   answerof-184589 ' value='743038'   \/><label for='answer-id-743038' id='answer-label-743038' class=' answer'><span>The VaR for the bond increases and its value decreases<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184589[]' id='answer-id-743039' class='answer   answerof-184589 ' value='743039'   \/><label for='answer-id-743039' id='answer-label-743039' class=' answer'><span>The VaR for the bond decreases and its value is unaffected<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184589[]' id='answer-id-743040' class='answer   answerof-184589 ' value='743040'   \/><label for='answer-id-743040' id='answer-label-743040' class=' answer'><span>The VaR for the bond increases and its value stays the same<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-81' style=';'><div id='questionWrap-81'  class='   watupro-question-id-184590'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>81. <\/span>Altman's Z-score does not consider which of the following ratios:<\/div><input type='hidden' name='question_id[]' id='qID_81' value='184590' \/><input type='hidden' id='answerType184590' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184590[]' id='answer-id-743041' class='answer   answerof-184590 ' value='743041'   \/><label for='answer-id-743041' id='answer-label-743041' class=' answer'><span>Market capitalization to debt<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184590[]' id='answer-id-743042' class='answer   answerof-184590 ' value='743042'   \/><label for='answer-id-743042' id='answer-label-743042' class=' answer'><span>Sales to total assets<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184590[]' id='answer-id-743043' class='answer   answerof-184590 ' value='743043'   \/><label for='answer-id-743043' id='answer-label-743043' class=' answer'><span>Net income to total assets<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184590[]' id='answer-id-743044' class='answer   answerof-184590 ' value='743044'   \/><label for='answer-id-743044' id='answer-label-743044' class=' answer'><span>Working capital to total assets<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-82' style=';'><div id='questionWrap-82'  class='   watupro-question-id-184591'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>82. <\/span>Which of the following methods cannot be used to calculate Liquidity at Risk?<\/div><input type='hidden' name='question_id[]' id='qID_82' value='184591' \/><input type='hidden' id='answerType184591' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184591[]' id='answer-id-743045' class='answer   answerof-184591 ' value='743045'   \/><label for='answer-id-743045' id='answer-label-743045' class=' answer'><span>Monte Carlo simulation<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184591[]' id='answer-id-743046' class='answer   answerof-184591 ' value='743046'   \/><label for='answer-id-743046' id='answer-label-743046' class=' answer'><span>Analytical or parametric approaches<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184591[]' id='answer-id-743047' class='answer   answerof-184591 ' value='743047'   \/><label for='answer-id-743047' id='answer-label-743047' class=' answer'><span>Historical simulation<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184591[]' id='answer-id-743048' class='answer   answerof-184591 ' value='743048'   \/><label for='answer-id-743048' id='answer-label-743048' class=' answer'><span>Scenario analysis<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-83' style=';'><div id='questionWrap-83'  class='   watupro-question-id-184592'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>83. <\/span>For a corporate issuer, which of the following can be used to calculate market implied default probabilities? <br \/>\r<br>I. CDS spreads <br \/>\r<br>II. Bond prices <br \/>\r<br>III. Credit rating issued by S&amp;P <br \/>\r<br>IV. Altman's scoring model<\/div><input type='hidden' name='question_id[]' id='qID_83' value='184592' \/><input type='hidden' id='answerType184592' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184592[]' id='answer-id-743049' class='answer   answerof-184592 ' value='743049'   \/><label for='answer-id-743049' id='answer-label-743049' class=' answer'><span>III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184592[]' id='answer-id-743050' class='answer   answerof-184592 ' value='743050'   \/><label for='answer-id-743050' id='answer-label-743050' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184592[]' id='answer-id-743051' class='answer   answerof-184592 ' value='743051'   \/><label for='answer-id-743051' id='answer-label-743051' class=' answer'><span>I, II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184592[]' id='answer-id-743052' class='answer   answerof-184592 ' value='743052'   \/><label for='answer-id-743052' id='answer-label-743052' class=' answer'><span>II and III<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-84' style=';'><div id='questionWrap-84'  class='   watupro-question-id-184593'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>84. <\/span>Which of the following is not a limitation of the univariate Gaussian model to capture the codependence structure between risk factros used for VaR calculations?<\/div><input type='hidden' name='question_id[]' id='qID_84' value='184593' \/><input type='hidden' id='answerType184593' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184593[]' id='answer-id-743053' class='answer   answerof-184593 ' value='743053'   \/><label for='answer-id-743053' id='answer-label-743053' class=' answer'><span>The univariate Gaussian model fails to fit to the empirical distributions of risk factors, notably their fat tails and skewness.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184593[]' id='answer-id-743054' class='answer   answerof-184593 ' value='743054'   \/><label for='answer-id-743054' id='answer-label-743054' class=' answer'><span>Determining the covariance matrix becomes an extremely difficult task as the number of risk factors increases.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184593[]' id='answer-id-743055' class='answer   answerof-184593 ' value='743055'   \/><label for='answer-id-743055' id='answer-label-743055' class=' answer'><span>It cannot capture linear relationships between risk factors.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184593[]' id='answer-id-743056' class='answer   answerof-184593 ' value='743056'   \/><label for='answer-id-743056' id='answer-label-743056' class=' answer'><span>A single covariance matrix is insufficient to describe the fine codependence structure among risk factors as non-linear dependencies or tail correlations are not captured.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-85' style=';'><div id='questionWrap-85'  class='   watupro-question-id-184594'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>85. <\/span>An investor holds a bond portfolio with three bonds with a modified duration of 5, 10 and 12 years respectively. The bonds are currently valued at $100, $120 and $150. <br \/>\r<br>If the daily volatility of interest rates is 2%, what is the 1-day VaR of the portfolio at a 95% confidence level?<\/div><input type='hidden' name='question_id[]' id='qID_85' value='184594' \/><input type='hidden' id='answerType184594' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184594[]' id='answer-id-743057' class='answer   answerof-184594 ' value='743057'   \/><label for='answer-id-743057' id='answer-label-743057' class=' answer'><span>115.51<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184594[]' id='answer-id-743058' class='answer   answerof-184594 ' value='743058'   \/><label for='answer-id-743058' id='answer-label-743058' class=' answer'><span>163.11<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184594[]' id='answer-id-743059' class='answer   answerof-184594 ' value='743059'   \/><label for='answer-id-743059' id='answer-label-743059' class=' answer'><span>370<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184594[]' id='answer-id-743060' class='answer   answerof-184594 ' value='743060'   \/><label for='answer-id-743060' id='answer-label-743060' class=' answer'><span>165<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-86' style=';'><div id='questionWrap-86'  class='   watupro-question-id-184595'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>86. <\/span>A bank evaluates the impact of large and severe changes in certain risk factors on its risk using a quantitative valuation model. <br \/>\r<br>Which of the following best describes this exercise?<\/div><input type='hidden' name='question_id[]' id='qID_86' value='184595' \/><input type='hidden' id='answerType184595' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184595[]' id='answer-id-743061' class='answer   answerof-184595 ' value='743061'   \/><label for='answer-id-743061' id='answer-label-743061' class=' answer'><span>Stress testing<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184595[]' id='answer-id-743062' class='answer   answerof-184595 ' value='743062'   \/><label for='answer-id-743062' id='answer-label-743062' class=' answer'><span>Simulation<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184595[]' id='answer-id-743063' class='answer   answerof-184595 ' value='743063'   \/><label for='answer-id-743063' id='answer-label-743063' class=' answer'><span>Scenario analysis<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184595[]' id='answer-id-743064' class='answer   answerof-184595 ' value='743064'   \/><label for='answer-id-743064' id='answer-label-743064' class=' answer'><span>Sensitivity analysis<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-87' style=';'><div id='questionWrap-87'  class='   watupro-question-id-184596'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>87. <\/span>If the cumulative default probabilities of default for years 1 and 2 for a portfolio of credit risky assets is 5% and 15% respectively, what is the marginal probability of default in year 2 alone?<\/div><input type='hidden' name='question_id[]' id='qID_87' value='184596' \/><input type='hidden' id='answerType184596' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184596[]' id='answer-id-743065' class='answer   answerof-184596 ' value='743065'   \/><label for='answer-id-743065' id='answer-label-743065' class=' answer'><span>15.79%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184596[]' id='answer-id-743066' class='answer   answerof-184596 ' value='743066'   \/><label for='answer-id-743066' id='answer-label-743066' class=' answer'><span>10.53%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184596[]' id='answer-id-743067' class='answer   answerof-184596 ' value='743067'   \/><label for='answer-id-743067' id='answer-label-743067' class=' answer'><span>10.00%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184596[]' id='answer-id-743068' class='answer   answerof-184596 ' value='743068'   \/><label for='answer-id-743068' id='answer-label-743068' class=' answer'><span>11.76%<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-88' style=';'><div id='questionWrap-88'  class='   watupro-question-id-184597'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>88. <\/span>In the case of historical volatility weighted VaR, a higher current volatility when compared to historical volatility:<\/div><input type='hidden' name='question_id[]' id='qID_88' value='184597' \/><input type='hidden' id='answerType184597' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184597[]' id='answer-id-743069' class='answer   answerof-184597 ' value='743069'   \/><label for='answer-id-743069' id='answer-label-743069' class=' answer'><span>will not affect the VaR estimate<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184597[]' id='answer-id-743070' class='answer   answerof-184597 ' value='743070'   \/><label for='answer-id-743070' id='answer-label-743070' class=' answer'><span>will increase the confidence interval<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184597[]' id='answer-id-743071' class='answer   answerof-184597 ' value='743071'   \/><label for='answer-id-743071' id='answer-label-743071' class=' answer'><span>will decrease the VaR estimate<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184597[]' id='answer-id-743072' class='answer   answerof-184597 ' value='743072'   \/><label for='answer-id-743072' id='answer-label-743072' class=' answer'><span>will increase the VaR estimate<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-89' style=';'><div id='questionWrap-89'  class='   watupro-question-id-184598'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>89. <\/span>Which of the following are true: <br \/>\r<br>I. Delta hedges need to be rebalanced frequently as deltas fluctuate with fluctuating prices. <br \/>\r<br>II. Portfolio managers are right to focus on primary risks over secondary risks. <br \/>\r<br>III. Increasing the hedge rebalance frequency reduces residual risks but increases transaction costs. <br \/>\r<br>IV. Vega risk can be hedged using options.<\/div><input type='hidden' name='question_id[]' id='qID_89' value='184598' \/><input type='hidden' id='answerType184598' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184598[]' id='answer-id-743073' class='answer   answerof-184598 ' value='743073'   \/><label for='answer-id-743073' id='answer-label-743073' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184598[]' id='answer-id-743074' class='answer   answerof-184598 ' value='743074'   \/><label for='answer-id-743074' id='answer-label-743074' class=' answer'><span>II, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184598[]' id='answer-id-743075' class='answer   answerof-184598 ' value='743075'   \/><label for='answer-id-743075' id='answer-label-743075' class=' answer'><span>I, II, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184598[]' id='answer-id-743076' class='answer   answerof-184598 ' value='743076'   \/><label for='answer-id-743076' id='answer-label-743076' class=' answer'><span>I, II and III<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-90' style=';'><div id='questionWrap-90'  class='   watupro-question-id-184599'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>90. <\/span>Which of the following losses can be attributed to credit risk: <br \/>\r<br>I. Losses in a bond's value from a credit downgrade <br \/>\r<br>II. Losses in a bond's value from an increase in bond yields <br \/>\r<br>III. Losses arising from a bond issuer's default <br \/>\r<br>IV. Losses from an increase in corporate bond spreads<\/div><input type='hidden' name='question_id[]' id='qID_90' value='184599' \/><input type='hidden' id='answerType184599' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184599[]' id='answer-id-743077' class='answer   answerof-184599 ' value='743077'   \/><label for='answer-id-743077' id='answer-label-743077' class=' answer'><span>I, III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184599[]' id='answer-id-743078' class='answer   answerof-184599 ' value='743078'   \/><label for='answer-id-743078' id='answer-label-743078' class=' answer'><span>II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184599[]' id='answer-id-743079' class='answer   answerof-184599 ' value='743079'   \/><label for='answer-id-743079' id='answer-label-743079' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184599[]' id='answer-id-743080' class='answer   answerof-184599 ' value='743080'   \/><label for='answer-id-743080' id='answer-label-743080' class=' answer'><span>I and III<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-91' style=';'><div id='questionWrap-91'  class='   watupro-question-id-184600'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>91. <\/span>Which of the following situations are not suitable for applying parametric VaR: <br \/>\r<br>I. Where the portfolio's valuation is linearly dependent upon risk factors <br \/>\r<br>II. Where the portfolio consists of non-linear products such as options and large moves are involved <br \/>\r<br>III. Where the returns of risk factors are known to be not normally distributed<\/div><input type='hidden' name='question_id[]' id='qID_91' value='184600' \/><input type='hidden' id='answerType184600' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184600[]' id='answer-id-743081' class='answer   answerof-184600 ' value='743081'   \/><label for='answer-id-743081' id='answer-label-743081' class=' answer'><span>I and II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184600[]' id='answer-id-743082' class='answer   answerof-184600 ' value='743082'   \/><label for='answer-id-743082' id='answer-label-743082' class=' answer'><span>II and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184600[]' id='answer-id-743083' class='answer   answerof-184600 ' value='743083'   \/><label for='answer-id-743083' id='answer-label-743083' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184600[]' id='answer-id-743084' class='answer   answerof-184600 ' value='743084'   \/><label for='answer-id-743084' id='answer-label-743084' class=' answer'><span>All of the above<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-92' style=';'><div id='questionWrap-92'  class='   watupro-question-id-184601'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>92. <\/span>Which of the following is not a parameter to be determined by the risk manager that affects the level of economic credit capital:<\/div><input type='hidden' name='question_id[]' id='qID_92' value='184601' \/><input type='hidden' id='answerType184601' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184601[]' id='answer-id-743085' class='answer   answerof-184601 ' value='743085'   \/><label for='answer-id-743085' id='answer-label-743085' class=' answer'><span>Risk horizon<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184601[]' id='answer-id-743086' class='answer   answerof-184601 ' value='743086'   \/><label for='answer-id-743086' id='answer-label-743086' class=' answer'><span>Confidence level<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184601[]' id='answer-id-743087' class='answer   answerof-184601 ' value='743087'   \/><label for='answer-id-743087' id='answer-label-743087' class=' answer'><span>Probability of default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184601[]' id='answer-id-743088' class='answer   answerof-184601 ' value='743088'   \/><label for='answer-id-743088' id='answer-label-743088' class=' answer'><span>Definition of credit losses<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-93' style=';'><div id='questionWrap-93'  class='   watupro-question-id-184602'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>93. <\/span>Which of the following statements is true: <br \/>\r<br>I. Expected credit losses are charged to the unit's P&amp;L while unexpected losses hit risk capital reserves. <br \/>\r<br>II. Credit portfolio loss distributions are symmetrical <br \/>\r<br>III. For a bank holding $10m in face of a defaulted debt that it acquired for $2m, the bank's legal claim in the bankruptcy court will be $10m. <br \/>\r<br>IV. The legal claim in bankruptcy court for an over the counter derivatives contract will be the notional value of the contract.<\/div><input type='hidden' name='question_id[]' id='qID_93' value='184602' \/><input type='hidden' id='answerType184602' value='checkbox'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184602[]' id='answer-id-743089' class='answer   answerof-184602 ' value='743089'   \/><label for='answer-id-743089' id='answer-label-743089' class=' answer'><span>I and III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184602[]' id='answer-id-743090' class='answer   answerof-184602 ' value='743090'   \/><label for='answer-id-743090' id='answer-label-743090' class=' answer'><span>I, II and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184602[]' id='answer-id-743091' class='answer   answerof-184602 ' value='743091'   \/><label for='answer-id-743091' id='answer-label-743091' class=' answer'><span>III and IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='checkbox' name='answer-184602[]' id='answer-id-743092' class='answer   answerof-184602 ' value='743092'   \/><label for='answer-id-743092' id='answer-label-743092' class=' answer'><span>II and IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div style='display:none' id='question-94'>\n\t<div class='question-content'>\n\t\t<img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.dumpsbase.com\/freedumps\/wp-content\/plugins\/watupro\/img\/loading.gif\" width=\"16\" height=\"16\" alt=\"Loading...\" title=\"Loading...\" \/>&nbsp;Loading...\t<\/div>\n<\/div>\n\n<br \/>\n\t\n\t\t\t<div class=\"watupro_buttons flex \" id=\"watuPROButtons5569\" >\n\t\t  <div 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