THE BEST PRACTICAL 8020 INFORMATION & LEADER IN QUALIFICATION EXAMS & AUTHORIZED PRMIA ORM CERTIFICATE - 2023 UPDATE

The Best Practical 8020 Information & Leader in Qualification Exams & Authorized PRMIA ORM Certificate - 2023 Update

The Best Practical 8020 Information & Leader in Qualification Exams & Authorized PRMIA ORM Certificate - 2023 Update

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Tags: Practical 8020 Information, Online 8020 Test, Test Certification 8020 Cost, Clearer 8020 Explanation, Latest 8020 Dumps Questions

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PRMIA 8020 Exam Syllabus Topics:

TopicDetails
Topic 1
  • Case Studies: This section of the exam measures the skills of Business Risk Consultants and covers real-world applications of risk management concepts. It examines case studies on risk governance, assessment, and mitigation strategies across different industries. A key skill measured is analyzing historical risk events for strategic insights.
Topic 2
  • Insurance Mitigation: This section of the exam measures the skills of Insurance Risk Managers and covers strategies for transferring risk through insurance and other financial instruments. It focuses on risk transfer mechanisms, policy structuring, and claims management. A key skill measured is assessing risk transfer options through insurance.
Topic 3
  • Risk Management Framework: This section of the exam measures the skills of Risk Managers and covers the development and implementation of structured approaches for risk identification, evaluation, and mitigation. It includes industry-standard frameworks that guide risk strategy and decision-making. A key skill measured is establishing a risk management framework for organizations.
Topic 4
  • Risk Modeling: This section of the exam measures the skills of Quantitative Risk Analysts and covers mathematical and statistical techniques used to predict risk scenarios. It explores model development, validation, and application in financial and operational risk management. A key skill measured is applying statistical models for risk prediction.
Topic 5
  • Risk Assessment: This section of the exam measures the skills of Financial Risk Analysts and covers methodologies for evaluating risks in different domains, including qualitative and quantitative approaches. It focuses on assessing vulnerabilities, threats, and potential impacts on business operations. A key skill measured is conducting risk impact analysis for financial threats.
Topic 6
  • Risk Governance: This section of the exam measures the skills of Compliance Officers and covers the policies, structures, and processes that define how organizations oversee risk. It explores regulatory compliance, ethical considerations, and corporate governance frameworks to ensure accountability. A key skill measured is applying governance frameworks to organizational risk policies.
Topic 7
  • Risk Information: This section of the exam measures the skills of Risk Managers and covers the collection, analysis, and communication of risk-related data. It highlights the role of data-driven decision-making in mitigating uncertainties and ensuring compliance. A key skill measured is interpreting risk data for informed decision-making.

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Practical 8020 Information and PRMIA Online 8020 Test: ORM Certificate - 2023 Update Pass Success

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PRMIA ORM Certificate - 2023 Update Sample Questions (Q59-Q64):

NEW QUESTION # 59
Managing financial crime is a part of risk and compliance for many firms. Which of the following is a useful control to help reduce this risk?

  • A. Local regulations that allow a bank to not report transactions by family members of the board.
  • B. Having the business be a cash only business and not report any transactions.
  • C. Development of scenarios and red flags that are used to monitor transactions and identify suspicious customers and activities.
  • D. The requirements to trace all transactions when they are entered into spreadsheets.

Answer: C

Explanation:
Financial Crime Risk Management
Managing financial crime requires implementing controls, monitoring, and reporting systems to detect and prevent illegal activities.
Developing red flags and monitoring scenarios allows firms to detect suspicious transactions related to money laundering, fraud, and terrorist financing.
Why Answer C is Correct
PRMIA emphasizes that effective risk management requires proactive monitoring of transactions using red flags, transaction patterns, and anomaly detection systems.
This is aligned with Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulatory requirements.
Why Other Answers Are Incorrect
Option
Explanation:
A . Having the business be a cash-only business and not report any transactions.
Incorrect - Cash-only businesses with no reporting are high-risk for financial crime.
B . The requirements to trace all transactions when they are entered into spreadsheets.
Incorrect - While transaction tracing is important, spreadsheets alone are not an effective control mechanism for financial crime.
D . Local regulations that allow a bank to not report transactions by family members of the board.
Incorrect - This would violate AML and financial crime regulations, increasing corruption risk.
PRMIA Reference for Verification
PRMIA Financial Crime and AML Risk Guidelines
Basel Committee on Financial Crime and Money Laundering


NEW QUESTION # 60
Risk Sensitive pricing is required for several good reasons. Which one of the following is not relevant to the Management's evaluation of the correct approach to Risk Sensitive pricing?

  • A. To ensure the income targets can be met or exceeded.
  • B. To adequately reward the investors for the capital they gave us to put at risk.
  • C. To link personal targets to risk-adjusted return requirements would reinforce the desired risk aware, culture.
  • D. To avoid the build-up of a skewed quality property portfolio.

Answer: A

Explanation:
Risk-sensitive pricing ensures that financial institutions and businesses properly account for risk in their pricing strategies to maintain stability and sustainability. PRMIA's Risk Pricing and Capital Adequacy Guidelines define the importance of risk-sensitive pricing in ensuring fair compensation for risk exposure and avoiding risk concentration issues.
Step 1: Why Risk-Sensitive Pricing Is Important
Aligns risk with return: Pricing should be designed to reflect the underlying risk and return trade-off.
Protects investors: Investors expect compensation for capital at risk (Option A is correct).
Reinforces risk-aware culture: PRMIA promotes linking incentives to risk-adjusted returns (Option B is correct).
Prevents adverse selection: Proper risk pricing prevents low-quality assets from accumulating (Option C is correct).
Step 2: Why Option D Is Incorrect
Income targets are business-driven, not risk-driven.
Risk-sensitive pricing aims to balance risk and reward, not just maximize revenue.
PRMIA discourages profit-seeking behavior at the expense of risk considerations.
PRMIA Risk Reference Used:
PRMIA Risk Pricing Guidelines - Defines the principles of risk-sensitive pricing.
PRMIA Risk-Adjusted Return Standards - Stresses linking incentives to risk-aware decisions.
PRMIA Capital Adequacy Framework - Highlights the role of risk-sensitive pricing in portfolio management.
Final Conclusion:
Risk-sensitive pricing is designed to align returns with risk exposure, not simply to meet or exceed income targets, making Option D the correct answer.


NEW QUESTION # 61
Stafford Beers Viable System Model (VSM) has several implementation elements. Which of the following is not one of these?

  • A. Process
  • B. Output
  • C. Input
  • D. Governance

Answer: C

Explanation:
Stafford Beer's Viable System Model (VSM)
VSM is a cybernetic model designed to analyze and improve organizational structures.
It consists of five core subsystems that define governance and operations.
Why Answer B is Correct
The VSM does not explicitly include "Input" as a key component.
The key elements of VSM include Governance, Process, and Output, but it does not define "Input" as a standalone concept.
Why Other Answers Are Incorrect
Option
Explanation:
A . Governance
Correct - Governance is part of VSM and deals with decision-making and oversight.
C . Process
Correct - Process represents the operational functions within VSM.
D . Output
Correct - Output refers to the results of the system's operations.
PRMIA Reference for Verification
PRMIA Governance and Cybernetic Systems Guidelines
Stafford Beer's Viable System Model Framework


NEW QUESTION # 62
The Internal Loss Multiplier (ILM) is part of the Basel III Standardized Approach. Which of these definitions best descibes it?

  • A. It is a non-financial factor that is based on a bank's average historical losses.
  • B. t is a scaling factor that is based on a bank's average historical losses.
  • C. It is uniform, and is used for indicating consistent incidents on an average return basis.
  • D. It is a financial-statement-based proxy for operational risk.

Answer: B

Explanation:
The Internal Loss Multiplier (ILM) is a key component of the Basel III Standardized Approach for Operational Risk. It is designed to adjust capital requirements based on a bank's historical loss experience.
Definition of ILM
ILM is a scaling factor that adjusts the operational risk capital requirement based on a bank's internal loss history.
It is derived using a formula that incorporates historical operational risk losses relative to a bank's revenue.
Why ILM Exists in Basel III
Basel III replaced the Advanced Measurement Approach (AMA) with a Standardized Approach that includes ILM to ensure that banks with high historical losses hold more capital for operational risk.
Why Other Answers Are Incorrect
Option
Explanation:
A . It is a financial-statement-based proxy for operational risk.
Incorrect - ILM is not a general financial statement proxy; it specifically adjusts capital based on past operational losses.
B . It is a non-financial factor that is based on a bank's average historical losses.
Incorrect - ILM is financial in nature because it directly influences capital requirements.
D . It is uniform, and is used for indicating consistent incidents on an average return basis.
Incorrect - ILM is not uniform; it is bank-specific and varies based on loss history.
PRMIA Reference for Verification
PRMIA Operational Risk Standards
Basel III Standardized Approach for Operational Risk


NEW QUESTION # 63
What are some of the properties of Bottom-Up KRIs?

  • A. Are not used due to changes in regulations.
  • B. Selected by local management, based on key controls or weaknesses identified by audit reports, reported on quarterly.
  • C. Selected by local management: tied to internal loss events at the legal entity, country, business and / or product level, reported daily, weekly or monthly.
  • D. Seated by senior management: tied to internal loss events at the legal entity, country, business and / or product level, reported.
    daily, weekly or monthly.

Answer: C

Explanation:
Definition of Bottom-Up KRIs
Bottom-Up Key Risk Indicators (KRIs) are identified at the operational level, focusing on localized risks within business units.
They are tied to actual internal loss events and reported frequently (daily, weekly, or monthly) to capture ongoing trends.
Key Properties of Bottom-Up KRIs
Selected by local management → Ensures relevance to specific business areas.
Tied to internal loss events → Helps in tracking risk patterns within specific legal entities, countries, or business units.
Reported frequently → Allows for timely risk detection and mitigation.
Why Answer D is Correct
Bottom-up KRIs focus on localized risk exposure and are monitored frequently to track operational changes.
Why Other Answers Are Incorrect
Option
Explanation:
A . Seated by senior management: tied to internal loss events at the legal entity, country, business, and/or product level, reported daily, weekly, or monthly.
Incorrect - Senior management sets top-down KRIs, while bottom-up KRIs are managed locally.
B . Selected by local management, based on key controls or weaknesses identified by audit reports, reported quarterly.
Incorrect - While audit reports are useful, bottom-up KRIs are based on loss events, not just audit findings. Quarterly reporting is too infrequent.
C . Are not used due to changes in regulations.
Incorrect - Bottom-up KRIs remain essential despite regulatory changes.
PRMIA Reference for Verification
PRMIA Risk Indicator Best Practices
Basel Committee's Risk Measurement and Reporting Guidelines


NEW QUESTION # 64
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