Exam 8011 Book | 8011 Valid Test Materials
Exam 8011 Book | 8011 Valid Test Materials
Blog Article
Tags: Exam 8011 Book, 8011 Valid Test Materials, New 8011 Exam Objectives, Exam 8011 Course, Valid 8011 Test Dumps
Having a good command of processional knowledge in this line, they represent the highest level of this 8011 exam and we hired them to offer help for you. They made high-end 8011 preparation exam with one-year supplementary updates one year long. If you want to have free exam questions or lower-priced practice materials, our website provide related materials for you. So their profession makes our 8011 Exam Prep trustworthy.
Our Credit and Counterparty Manager (CCRM) Certificate Exam (8011) exam questions are being offered in three easy-to-use and compatible formats. These PRMIA 8011 exam dumps formats offer a user-friendly interface and are compatible with all devices, operating systems, and browsers. The Credit and Counterparty Manager (CCRM) Certificate Exam (8011) PDF questions file contains real and Valid 8011 Exam Questions that assist you in 8011 exam dumps preparation and boost the candidate's confidence to pass the challenging Credit and Counterparty Manager (CCRM) Certificate Exam (8011) exam easily. The Credit and Counterparty Manager (CCRM) Certificate Exam (8011) PDF dumps file work with all devices and operating system.
8011 Valid Test Materials & New 8011 Exam Objectives
This format of our 8011 product is easiest to use due to its compatibility with web-browsers. This handy feature makes it your go-to online platform to evaluate your preparation. Conceptual and tough 8011 questions will prompt on your screen which will test your true concepts. PRMIA Certification Exams Questions taken from past papers will also be given to give you a brief idea of the actual difficulty level of the Credit and Counterparty Manager (CCRM) Certificate Exam (8011) exam. Its large question bank prepares you to ace your exam with ease and it will also help you to pinpoint your mistakes and weaknesses and work on them.
PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q275-Q280):
NEW QUESTION # 275
When pricing credit risk for an exposure, which of the following is a better measure than the others:
- A. Mark-to-market
- B. Potential Future Exposure (PFE)
- C. Notional amount
- D. Expected Exposure (EE)
Answer: D
Explanation:
Exposure for derivative instruments can vary significantly over the lifetime of the instrument, depending upon how the market moves. The potential future exposure represents the extremes, notthe most likely outcome.
The expected exposure is the most suitable measure for pricing the credit risk. Over time, as multiple transactions are entered into, the expectation (or the mean) will be realized - though individual transactions may have more or less by way of exposure.
The notional amount may not be relevant, though for loans it may be the most important contributor to the expected exposure. Mark-to-market will represent the exposure at a given point in time, but cannot be predicted nor be used to price the credit risk.
NEW QUESTION # 276
A cumulative accuracy plot:
- A. measures accuracy of default probabilities observed empirically
- B. is a measure of the correctness of VaR calculations
- C. measures the accuracy of credit risk estimates
- D. measures rating accuracy
Answer: D
Explanation:
A cumulative accuracy plot measures the accuracy of credit ratings assigned by rating agencies by considering the relative rankings of obligors according to the ratings given. Choice 'd' is the correct answer.
NEW QUESTION # 277
Changes in which of the following do not affect the expected default frequencies (EDF) under the KMV Moody's approach to credit risk?
- A. Changes in the debt level
- B. Changes in the risk free rate
- C. Changes in asset volatility
- D. Changes in the firm's market capitalization
Answer: B
Explanation:
EDFs are derived from the distance to default. The distance to default is the number of standard deviations that expected asset values are away from the default point, which itself is defined as short term debt plus half of the long term debt. Therefore debt levels affect the EDF. Similarly, assetvalues are estimated using equity prices. Therefore market capitalization affects EDF calculations. Asset volatilities are the standard deviation that form a place in the denominator in the distance to default calculations. Therefore asset volatility affects EDF too. The risk free rate is not directly factored in any of these calculations (except of course, one could argue that the level of interest rates may impact equity values or the discounted values of future cash flows, but that is a second order effect). Therefore Choice 'b' is the correct answer.
NEW QUESTION # 278
If A and B be two uncorrelated securities, VaR(A) and VaR(B) be their values-at-risk, then which of the following is true for a portfolio that includes A and B in any proportion. Assume the prices of A and B are log- normally distributed.
- A. The combined VaR cannot be predicted till the correlation is known
- B. VaR(A+B) > VaR(A) + VaR(B)
- C. VaR(A+B) = VaR(A) + VaR(B)
- D. VaR(A+B) < VaR(A) + VaR(B)
Answer: D
Explanation:
First of all, if prices are lognormally distributed, that implies the returns (which are equal to the log of prices) are normally distributed. To say that prices are lognormally distributed is just another way of saying that returns are normally distributed.
Since the correlation between the two securities is zero, this means their variances can be added. But standard deviations, or volatilities cannot be added (they will be the square root of sum of variances). VaR is nothing but a multiple of standard deviation, and therefore it is not additive if correlations are anything other than 1 (ie perfect positive, which would imply we are dealing with the same asset). Therefore VaR(A+B)=SQRT(VaR (A)