EMT Practice Test

1. Question Content...

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Question1: 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

Question2: The early 2003 trading strategy of China Aviation oil was

Question3: What was the main risk scenario on the Metallgesellschaft trading strategy?

Question4: When Fannie Mae and Freddie Mac were taken under US government conservatorship, which of the following was not included within their operating mandate?

Question5: With respect to the Purpose of Professional Standards, in the event of any difference in standards between local laws/rules and those of PRMIA, members must

Question6: Which of the following best characterize the problems that developed at Bankers Trust?

Question7: Several clients, including Procter and Gamble took legal action against Bankers Trust, claiming Bankers Trust

Question8: What is (are) the lesson(s) of the Barings' failure?

Question9: As a result of the US government's intervention, which of the following is true?

Question10: Zheng Zhu wants to open a new PRMIA Chapter in Wuhan, China. He can do this if:

Question11: Which of the following was not considered to be a positive outcome of the Northern Rock Case Study?

Question12: Which of the following are PRMIA Governance Principles?
I. Independence of Key Parties
II. Disclosure and Transparency
III. Internal Validation
IV. Solvency

Question13: Barings failed to recognize that Nick Leeson's losses were increasing because:

Question14: What was the main type of risk that Metallgesellschaft was exposed to?

Question15: Which of the following was NOT a factor in the National Australia Bank case?

Question16: The steps which the US Treasury Department and the Federal Reserve took in July 2008 to boost confidence in both Fannie Mae and Freddie Mac did not include which one of the following:

Question17: Barings Bank and Orange County have many similarities. Which of the following is NOT a similarity?

Question18: Which of the following best characterizes the problems that developed at Bankgesellschaft Berlin?

Question19: Corporate Governance ...

Question20: PRMIA is incorporated as:

Question21: A PRMIA member is offered a highly paid work assignment on the condition that some aspects of assignment are not to be done according to PRMIA standards.
What should they do?

Question22: How much of Washington Mutual's assets were funded by customer deposits for the decade ending in 2006?

Question23: The hedging strategy employed by MG Refining & Marketing has been called:

Question24: Boards of Directors, including Audit and Risk Committees must review thoroughly compensation plans of potentially "highly compensated positions" for:
I. competitive market conditions
II. ensuring compliance with their corporate risk appetite and fiduciary responsibility to shareholders III. ensuring any discretionary bonus plans are geared towards keeping high income / revenue generators IV. reporting all such personnel to the local regulator

Question25: Which is NOT part of the guidance on Professional Conduct in the PRMIA Standards of Best Practice, Conduct and Ethics (Code of Conduct)?

Question26: As a PRMIA member, you have certain responsibilities. Among these are the requirement(s) to:

Question27: The Basic Knowledge a PPRMIA member should comply with, as stipulated within the PRMIA Standards of Best Practice, Conduct & Ethics, is to

Question28: Which of the following would have contributed to noticing and preventing Leeson's violations at Barings?

Question29: Which of the following was not cited within the chain of miscalculations and deferred decisions for the downfall of Fannie Mae and Freddie Mac

Question30: The problems at Bankers Trust can best be characterized as failures related to:

Question31: Taisei Fire and Marine Insurance Co

Question32: A VaR model for managing market risk at Barings Bank in London would most likely have:

Question33: When considering the performance of Northern Rock within its peer group of banks, which of the following is not correct?

Question34: Boards, including Audit and Risk Committees must:
I. Clearly articulate the corporate risk appetite to senior management
II. Thoroughly review compensation plans of potentially "highly compensated positions" for consistency with corporate risk appetite, competitive market conditions and fiduciary responsibility to shareholders III. Have a single member formally given responsibility for understanding and reporting the effectiveness of the corporation's risk management infrastructure IV. Be fully accountable to shareholders and work to the benefit of public good and financial stability

Question35: The Chair, Vice Chair, Secretary and Treasurer of the PRMIA Board of Directors are elected by:

Question36: As LTCM started to have major losses, it compounded its problems by doing what?

Question37: The Fortress Re accounting risk transfer procedures

Question38: Which of the following CANNOT be counted as a reason why LTCM was given a rescue package and not left to default?

Question39: According to the Group of 30 Report, option contracts: