EMT Practice Test

1. Question Content...

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Question1: According to the Group of 30 Report, option contracts:

Question2: A risk assessment report generated by a PRMIA member creates an apparent conflict of interest between the PRMIA standards and those of the client organization.
Of the following, which is the correct hierarchy to follow to resolve the conflict?
I The decision of a superior within the organization
II PRMIA Standards
III Guidelines from the regulators in which the organization operates
IV The laws of the country

Question3: The problems in the Orange County case can best be characterized as failures related to:

Question4: Which of the following would have contributed to noticing and preventing Leeson's violations at Barings?

Question5: When describing the reasons for the collapse of China Aviation Oil, which of the following was not cited?

Question6: National Australia Bank and Barings cases are similar in that:

Question7: According to LTCM managers:

Question8: With a PRMIA member's need to reconcile their internal and external responsibility to perform their work in an independent and appropriate fiduciary manner, which of the following options must be taken into consideration when performing risk management duties?

Question9: What was the main risk scenario on the Metallgesellschaft trading strategy?

Question10: Which items below were at the core of the problems at Bankgesellschaft Berlin?

Question11: The early 2003 trading strategy of China Aviation oil was

Question12: Which of the following does NOT relate to the Orange County case?

Question13: According to the Group of 30 Report, dealers and end-users are encouraged to:

Question14: Taisei Fire and Marine Insurance Co

Question15: According to PRMIA governance principles, boards and audit committees should ...

Question16: Which of the following are PRMIA Governance Principles?
I Independence of Key Parties
II Disclosure and Transparency
III Internal Validation
IV Solvency

Question17: The "Renewing the Dream" program signed into law by President George W Bush in 2002 was designed to

Question18: Which of the following is NOT part of the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct) Guidance on Ethical Behavior?

Question19: Corporate Governance ...

Question20: The problems which initiated the crisis at Northern Rock during the summer of 2007 were:

Question21: As a result of the US government's intervention, which of the following is true?

Question22: What is (are) the lesson(s) of the Barings' failure?

Question23: Finite insurance is reinsurance which

Question24: The key people involved in the application of good governance and risk management must:
I be trustworthy
II be honest
III be approved by the local regulator
IV treat others fairly at all times

Question25: Barings failed to recognize that Nick Leeson's losses were increasing because:

Question26: For the sentence
"The organization shall encourage all employees to keep abreast of the latest developments in their particular areas of expertise, through ____________, _____________, and _____________ and shall make adequate resources available to enable this to occur," Choose the correct combinations of words from the following options:

Question27: Metallgesellschaft's retail contracts were

Question28: When Fannie Mae and Freddie Mac were taken under US government conservatorship, which of the following was not included within their operating mandate?

Question29: Which of the following is FALSE?

Question30: Which of the following are PRMIA Governance Principles?
I Independence of Key Parties
II Disclosure and Transparency
III Internal Validation
IV Solvency

Question31: Every PRMIA chapter is designed to serve the local needs of members, so they often have fairly independent planning structures and ideas. According to the PRMIA Bylaws, Regional Chapters and Regional Directors:

Question32: Which of the following was not considered to be a positive outcome of the Northern Rock Case Study?

Question33: MGRM's losses due to "stacking" started to increase when

Question34: The Basic Knowledge a PPRMIA member should comply with, as stipulated within the PRMIA Standards of Best Practice, Conduct & Ethics, is to

Question35: PRMIA Governance Principles

Question36: Which of the following CANNOT be counted as a reason why LTCM was given a rescue package and not left to default?

Question37: How much of Washington Mutual's assets were funded by customer deposits for the decade ending in 2006?

Question38: Which of the following best characterize the problems that developed at Bankers Trust?

Question39: What was the most important loss for Bankers Trust?

Question40: Which of the following best characterizes the problems that developed at Bankgesellschaft Berlin?

Question41: The Risk Management Infrastructure of an organization must:
I To the extent possible, avoid silos of control and oversight
II Have budgets set by the business unit leaders
III Actively provide ongoing professional development for risk management staff and require them to be committed to standards of best practice, conduct and ethics in their work IV Provide general risk management and related corporate governance training for employees of the organization as a Whole

Question42: Up until 2006, which of the following was not a primary driver for Washington Mutual's earning?

Question43: Employees shall be remunerated adequately for the roles that they perform, where 'adequately' is defined

Question44: PRMIA is incorporated as:

Question45: The Chair of the PRMIA Board of Directors may hold the following offices:

Question46: A risk manager has just completed a risk assessment project. The report has been given to the risk manager's direct supervisor, who refuses to escalate the material issues raised in the report. Further, the direct supervisor edits the report to remove the section describing the material risk, who then submits it to the firm's Executive Committee.
According to the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct), which of the following actions is most appropriate:

Question47: The failure of Washington Mutual was NOT due to which one of the following?

Question48: When considering the performance of Northern Rock within its peer group of banks, which of the following is not correct?

Question49: The financial intermediary services provided by Fannie Mae and Freddie Mac were designed to