Practice 8010 Exam Online

Question 1

In respect of operational risk capital calculations, the Basel II accord recommends a confidence leveland time horizon of

A : 99.9% confidence level over a 10 day time horizon

B : 99% confidence level over a 10 year time horizon

C : 99% confidence level over a 1 year time horizon

D : 99.9% confidence level over a 1 year time horizon

Answer: D

Question 2

Once the frequency and severity distributions for loss events have been determined, which of the following is an accurate description of the process to determine a full loss distribution for operational risk?

A : A firm wide operational risk distribution is generated by adding together the frequency and severity distributions

B : A firm wide operational risk distribution is generated using Monte Carlo simulations

C : A firm wide operational risk distribution is set to be equal to the product of the frequency and severity distributions

D : The frequency distribution alone forms the basis for the loss distribution for operational risk

Answer: B

Question 3

Which of the following statements are true:

I. Credit risk and counterparty risk are synonymous

II. Counterparty risk is the contingent risk from a counterparty's default in derivative transactions

III. Counterparty risk is the risk of a loan default or the risk from moneys lent directly

IV. The exposure at default is difficult to estimate for credit risk as it depends upon market movements

A : II and III

B : I and II

C : II

D : III and IV

Answer: C

Question 4

The Options Theoretic approach to calculating economic capital considers the value of capital as being equivalent to a call option with a strike price equal to:

A : The notional value ofthe debt

B : The market value of the debt

C : The value of the firm

D : The value of the assets

Answer: A

Question 5

A bullet bond and an amortizing loan are issued at the same time with the same maturity and with the same principal. Which of these would have a greater credit exposure halfway through their life?

A : Indeterminate with the given information

B : They would have identical exposure half way through their lives

C : The amortizing loan

D : The bullet bond

Answer: D

Name:	Operational Risk Manager (ORM)
Exam Code:	8010
Certification:	PRM
Vendor:	PRMIA
Total Questions:	242
Last Updated:	Sep 02, 2026

PRMIA 8010 Answers