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Exam Code: 8004
Exam Name: PRM Certification - Exam IV: Case Studies; Standards: Governance, Best Practices and Ethics
Updated: Jul 29, 2026
Q & A: 112 Questions and Answers
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| Section | Weight | Objectives |
|---|---|---|
| PRMIA Principles of Good Governance | 20% | - Risk appetite and accountability - Transparency and disclosure - Risk governance frameworks - Board and senior management responsibilities |
| PRMIA Standards of Best Practice, Conduct and Ethics | 30% | - Compliance with laws and regulations - Code of professional conduct - Professional integrity and accountability - Ethical decision-making framework |
| PRMIA Case Studies | 50% | - Risk management lessons learned - Root cause identification - Historical risk failure analysis - Application of risk principles to scenarios |
1. PRMIA Governance Principles
A) must be adhered to by all PRMIA member organizations
B) must be adhered to by all financial firms that are PRMIA members
C) must be adhered to by all PRM charter holders
D) is a set of recommendations based on research and best practice
2. According to the PwC report China Aviation Oil, in order to avoid recording and reporting losses, the company adopted which approach covering up its losses?
A) selling long-term options with extremely high-risk profiles to generate premiums to cover the cost of closing out loss-making option positions
B) selling short-term options with extremely low-risk profiles to generate premiums to cover the cost of closing out loss-making option positions
C) selling long-term options with extremely low-risk profiles to generate premiums to cover the cost of closing out loss-making option positions
D) selling short-term options with extremely high-risk profiles to generate premiums to cover the cost of closing out loss-making option positions
3. Taisei Fire and Marine Insurance Co
A) had a full understanding from other members of the pool of the pool's liabilities
B) had a full understanding from Fortress Re of the risks in the pool
C) relied almost entirely on Fortress Re's management team for information on the risks in its portfolio
D) relied on the information it received from other members of the reinsurance pool to manage its risks
4. TMFI's internal procedures and management were
A) None of the above
B) absolutely unaware of their uninsured liabilities
C) aware that they had some uninsured liabilities but thought they had enough capital to withstand any uninsured losses
D) fully aware of the uninsured risks Fortress Re were taking
5. 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:
A) Access to the Federal Reserve discount window
B) Removing the prohibition on the Treasury Department to buy both companies stock
C) Reiterating their belief that both companies played a central role in the US housing finance system
D) Restricting the sale of new Fannie Mae and Freddie Mac securities only to US citizens
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: A | Question # 3 Answer: C | Question # 4 Answer: B | Question # 5 Answer: C |
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