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The following 8008 questions are part of our PRMIA 8008 real exam questions full version. There are 362 in our 8008 full version. All of our 8008 real exam questions can guarantee you success in the first attempt. If you fail 8008 exam with our PRMIA 8008 real exam questions, you will get full payment fee refund. Want to practice and study full verion of 8008 real exam questions? Go now!

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PRMIA 8008 Exam Actual Questions

The questions for 8008 were last updated on Feb 21,2025 .

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Question#1

Which of the following is not a credit event under ISDA definitions?

A. Restructuring
B. Obligation accelerations
C. Rating downgrade
D. Failure to pay

Explanation:
According to ISDA, a credit event is an event linked to the deteriorating credit worthiness of an underlying reference entity in a credit derivative. The occurrence of a credit event usually triggers full or partial termination of the transaction and a payment from protection seller to protection buyer.
Credit events include
- bankruptcy,
- failure to pay,
- restructuring,
- obligation acceleration,
- obligation default and
- repudiation/moratorium.
A rating downgrade is not a credit event.

Question#2

Which of the following are measures of liquidity risk
I. Liquidity Coverage Ratio
II. Net Stable Funding Ratio
III. Book Value to Share Price
IV. Earnings Per Share

A. III and IV
B. I and II
C. II and III
D. I and IV

Explanation:
In December 2009 the BIS came out with a new consultative document on liquidity risk.
Given the events of 2007 - 2009, it has been clear that a key characteristic of the financial crisis was the inaccurate and ineffective management of liquidity risk
The paper two separate but complementary objectives in respect of liquidity risk management: The first objective relates to the short-term liquidity risk profile of institution, and the second objective is to promote resiliency over longer-term time horizons.
The paper identifies the following two ratios - you should be aware of these - though I am not sure if these will show up in the PRMIA exam:

Question#3

Which of the following statements are true:
I. The three pillars under Basel II are market risk, credit risk and operational risk.
II. Basel II is an improvement over Basel I by increasing the risk sensitivity of the minimum capital requirements.
III. Basel II encourages disclosure of capital levels and risks

A. III only
B. I only
C. I and II
D. II and III

Explanation:
The three pillars under Basel II are minimum capital requirements, supervisory review process and market discipline. Therefore statement I is false. The other two statements are accurate. Therefore Choice 'd' is the correct answer.

Question#4

CORRECT TEXT
A Monte Carlo simulation based VaR can be effectively used in which of the following cases:

A. When returns data cannot be analytically modeled
B. When returns are discontinuous or display large jumps
C. Where analytical methods are too complex to effectively use
D. All of the above

Explanation:
Monte Carlo simulations can be effectively used in all cases where an analytical estimate of the VaR cannot be made for any reason - which may include complexity of portfolios, discontinuities or non-linearity in returns or just the plain unavailability of closed form analytical models. Therefore Choice 'd' is the correct answer.

Question#5

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.
What is the EWMA estimate of the volatility the next day? Assume the persistence parameter = 0.93.

A. 0.0421
B. 0.0224
C. 0.0429
D. 0.0018

Explanation:
The correct answer is choice 'a'
Recall the formula for calculating variance under EWMA. See below. Therefore the correct answer is =SQRT ((1 - 0.93) *(LN (11/10))^2 + 0.93*((3.5%^2))) = 4.21%. Other answers are incorrect. Note that continuous returns are to be used, ie ln (11/10) and not discrete returns (=1/10) - though generally the difference between the two is small over short time periods. (If in the exam the answer doesn't exactly match, try using discrete returns.)


Exam Code: 8008Q & A: 362 Q&AsUpdated:  Feb 21,2025

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