PROFESSIONAL DUMP 8020 FILE, ONLINE 8020 LAB SIMULATION

Professional Dump 8020 File, Online 8020 Lab Simulation

Professional Dump 8020 File, Online 8020 Lab Simulation

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With every PRMIA 8020 practice test attempt, you will see yourself improve gradually, and on PRMIA 8020 exam day, you will be able to finish the ORM Certificate - 2023 Update 8020 exam as far as possible and space enough time to do an entire check for careless mistakes. Download the full version of ExamsLabs 8020 PDF Questions and practice tests and start your professional journey. We ensure you can pass the ORM Certificate - 2023 Update 8020 exam on the first attempt.

PRMIA 8020 Exam Syllabus Topics:

TopicDetails
Topic 1
  • 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 2
  • 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 3
  • 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 4
  • 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.

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PRMIA ORM Certificate - 2023 Update Sample Questions (Q34-Q39):

NEW QUESTION # 34
In the Basel III standardized approach for operational risk, what is the Business Indicator?

  • A. It is a scaling factor that is based on a bank's average historical losses.
  • B. It is a proxy for operational risks that relate to near-miss events.
  • C. It is a financial-statement-based proxy for operational risk.
  • D. It is a non-financial-statement-based proxy for operational risk.

Answer: C

Explanation:
Step 1: Definition of the Business Indicator (BI) in Basel III
The Business Indicator (BI) is a financial-statement-based metric used in Basel III's Standardized Approach for Operational Risk.
It replaces previous approaches by using financial figures (e.g., revenue, fees, interest income) to estimate operational risk exposure.
Step 2: Why Option D Is Correct
The BI uses financial-statement data to calculate operational risk capital requirements.
It acts as a proxy for a bank's operational risk exposure by linking operational risk to its financial size and complexity.
Step 3: Why the Other Options Are Incorrect
Option A ("Proxy for near-miss events") → Incorrect because BI is based on financial data, not near-miss risk events.
Option B ("Non-financial-statement-based proxy") → Incorrect because BI is explicitly derived from financial statements.
Option C ("Scaling factor based on historical losses") → Incorrect because BI does not use historical losses directly-it relies on financial-statement inputs.
PRMIA Risk Reference Used:
Basel III Operational Risk Framework - Defines the Business Indicator as a financial-statement-based metric.
PRMIA Operational Risk Guidelines - Explains the BI's role in capital calculations.


NEW QUESTION # 35
For the FTX case study, what was the "backdoor" used for?

  • A. It allowed trading firm Alameda to borrow S65 billion of clients' money from the exchange without their permission.
  • B. It allowed currency traders to smooth profits and conceal losses for over two years.
  • C. It allowed a stable coin to be removed from the ledger and added to the balance sheet.
  • D. It allowed a rapid pace of acquisitions but poor integration of acquired companies.

Answer: A

Explanation:
The FTX collapse involved fraudulent fund mismanagement, where FTX executives created a "backdoor" to allow Alameda Research (FTX's sister trading firm) to borrow client funds without their consent.
Step 1: The "Backdoor" in FTX
The backdoor was a hidden code in FTX's system, allegedly created by Sam Bankman-Fried, which allowed Alameda to access customer deposits without triggering alerts to auditors or compliance teams.
Alameda used these funds for risky trading strategies and investments, leading to the eventual collapse of FTX when a liquidity crunch exposed the missing funds.
Step 2: Why the Other Options Are Incorrect
Option A ("allowed a stablecoin to be removed from the ledger and added to the balance sheet") Incorrect because FTX's fraud involved misuse of customer funds, not just a stablecoin misclassification.
Option C ("allowed currency traders to smooth profits and conceal losses for over two years") Incorrect because this sounds more like LIBOR-rigging scandals, whereas FTX misappropriated client funds.
Option D ("allowed a rapid pace of acquisitions but poor integration of acquired companies") Incorrect because FTX's collapse was due to financial fraud, not poor acquisition strategy.
PRMIA Risk Reference Used:
PRMIA Financial Crime Risk Management - Discusses insider risk and fraudulent misappropriation of funds.
FTX Collapse Reports - SEC, CFTC, and DOJ filings confirm that Alameda had unauthorized access to client funds.
Final Conclusion:
FTX's backdoor enabled Alameda to take $65 billion in client funds without permission, making Option B the correct answer.


NEW QUESTION # 36
Ideally, which of the following should be completed as part of the risk assessments of service providers?

  • A. A review of the pay levels of the staff supporting the service.
  • B. An assessment of a third party should not include its compliance and risk infrastructure, financials, business strategy and operating history.
  • C. An assessment of a third party should include its compliance and risk infrastructure, financials, business strategy and operating history.
  • D. Onsite visits are not advantageous for understanding the third party's risks and control environment.

Answer: C

Explanation:
Third-Party Risk Management (TPRM)
PRMIA highlights the importance of conducting thorough due diligence on third-party vendors and service providers.
This includes evaluating compliance programs, risk management frameworks, financial stability, strategic objectives, and operational history.
Key Areas of Third-Party Risk Assessment
Compliance and Risk Infrastructure → Ensures that the provider meets regulatory and security requirements.
Financial Health → Determines whether the provider has the financial stability to support long-term service delivery.
Business Strategy → Helps assess alignment with the organization's risk appetite and goals.
Operating History → Evaluates experience and reliability in delivering services.
Why Other Answers Are Incorrect
Option
Explanation:
B . An assessment of a third party should not include its compliance and risk infrastructure, financials, business strategy, and operating history.
Incorrect - Ignoring these critical factors increases the risk of working with an unreliable vendor.
C . Onsite visits are not advantageous for understanding the third party's risks and control environment.
Incorrect - Onsite visits are highly valuable as they provide first-hand insights into operational controls. PRMIA encourages risk managers to conduct site visits.
D . A review of the pay levels of the staff supporting the service.
Incorrect - Employee salaries are not a primary risk factor in vendor assessments. The focus should be on the vendor's security, compliance, and operational risks.
PRMIA Reference for Verification
PRMIA Third-Party Risk Management (TPRM) Guidelines - Details best practices for vendor risk assessments.
Basel Principles on Outsourcing and Third-Party Risk - Provides regulatory guidance on evaluating third-party service providers.


NEW QUESTION # 37
In operational resilience, material customer detriment or significant harm to the customer is which of the following?

  • A. This is when disruption to a service results in not just an inconvenience to a customer, but a material cost or hardship.
  • B. This is when disruption to a service results in an inconvenience to a customer and damage to the firm's reputation.
  • C. This has a low threshold and refers to any inconvenience to a customer that results in a complaint.
  • D. This is the ability of a financial system to continue to function, even in the face of significant disruption or financial shocks.

Answer: A

Explanation:
Step 1: Definition of Material Customer Detriment
Material customer detriment refers to service disruptions that cause financial loss, inability to access essential services, or significant hardship.
PRMIA and UK FCA Operational Resilience Standards define "significant harm" as going beyond inconvenience to include monetary or operational distress.
Step 2: Why Option D is Correct
Significant harm occurs when customers face tangible financial or service losses, not just reputational inconvenience.
Regulatory frameworks (e.g., Basel, FCA, PRMIA) require banks to protect customers from material disruptions.
Step 3: Why the Other Options Are Incorrect
Option A ("Low threshold, any complaint") → Incorrect because not all complaints indicate material detriment.
Option B ("Inconvenience and reputational damage") → Incorrect because true material harm is more than just inconvenience.
Option C ("Financial system resilience") → Incorrect because this describes systemic financial stability, not customer impact.
PRMIA Risk Reference Used:
PRMIA Operational Resilience Framework - Defines material customer detriment.
UK FCA Operational Resilience Guidelines - Requires firms to minimize severe harm to customers.
Final Conclusion:
Material customer detriment involves actual financial hardship, not just inconvenience, making Option D the correct answer.


NEW QUESTION # 38
Internal loss data (ILD) consists of what kind of data?

  • A. It consists of near miss operational loss incidents of a bank.
  • B. It consists of historical operational loss incidents of a bank.
  • C. It consists of the Key Risk Indicators of a bank.
  • D. It consists of scenario data develeloped to calcuate the future operational loss incidents of a bank.

Answer: B

Explanation:
Definition of Internal Loss Data (ILD)
Internal Loss Data (ILD) refers to historical records of actual operational losses incurred by a bank.
These losses are used for risk assessment, capital calculations, and trend analysis under Basel III's Operational Risk Framework.
Key Characteristics of ILD
Captures actual past loss events, such as fraud, system failures, and compliance breaches.
Supports the identification of risk trends and weak control areas.
Used for operational risk capital modeling, along with external loss data and scenario analysis.
Why Other Answers Are Incorrect
Option
Explanation:
A . It consists of near miss operational loss incidents of a bank.
Incorrect - ILD captures actual losses, while near misses are reported separately.
C . It consists of the Key Risk Indicators of a bank.
Incorrect - KRIs are forward-looking risk metrics, while ILD focuses on historical data.
D . It consists of scenario data developed to calculate the future operational loss incidents of a bank.
Incorrect - ILD is historical, whereas scenario data is used for predictive analysis.
PRMIA Reference for Verification
Basel III & PRMIA Operational Risk Data Framework
PRMIA Risk Management Standards for ILD


NEW QUESTION # 39
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