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PRMIA 8010 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Operational Resilience | 5% | - Business continuity and recovery - DORA and resilience regulations - Third-party/vendor risk management |
| Topic 2: Risk Governance | 15% | - Roles of first, second, and third lines of defense - Governance structures and responsibilities - Risk culture and ethical conduct |
| Topic 3: Risk Assessment | 20% | - Top-down scenario analysis - Residual risk and issue management - Risk and Control Self-Assessment (RCSA) - Bottom-up process modeling |
| Topic 4: Introduction to Operational Risk Management | 10% | - ESG and climate risk considerations - Risk management frameworks and principles - Embedding risk management practices |
| Topic 5: Compliance & Regulatory Risk | 10% | - Basel Accords and global regulations - Compliance risk types and controls - Enterprise compliance frameworks |
| Topic 6: Risk Information & Monitoring | 15% | - Risk reporting and communication - Key Risk Indicators (KRIs) - Loss data collection and analysis |
| Topic 7: Risk Management Framework | 15% | - Strategy and framework implementation - Risk policies, limits, and pricing - Risk capacity and risk appetite |
| Topic 8: Operational Risk Capital & Modeling | 10% | - Basel III and recent developments - Capital requirements and approaches - Basic and advanced measurement methods |
PRMIA Operational Risk Manager (ORM) Sample Questions:
Question 1
Which of the following was not a policy response introduced by Basel 2.5 in response to the global financial crisis:
A. Stressed VaR (SVaR)
B. Comprehensive Capital Analysis and Review (CCAR)
C. Comprehensive Risk Model (CRM)
D. Incremental Risk Charge (IRC)
Question 2
Which of the following statements is true:
I. Recovery rate assumptions can be easily made fairly accurately given past data available from credit rating agencies.
II. Recovery rate assumptions are difficult to make given the effect of the business cycle, nature of the industry and multiple other factors difficult to model.
III. The standard deviation of observed recovery rates is generally very high, making any estimate likely to differ significantly from realized recovery rates.
IV. Estimation errors for recovery rates are not a concern as they are not directionally biased and will cancel each other out over time.
A. II and IV
B. I, II and IV
C. III and IV
D. II and III
Question 3
Which of the beloware a way to classify risk governance structures:
A. Committee based, regulation based and board mandated
B. Reactive, Preventative and Active
C. Top-down and Bottom-up
D. Active and Passive
Question 4
When modeling operational risk using separate distributions for loss frequency and loss severity, whichof the following is true?
A. Loss severity and loss frequency are modeled usingthe same units of measurement
B. Loss severity and loss frequency are modeled as conditional probabilities
C. Loss severity and loss frequency distributions are considered as a bivariate model with positive correlation
D. Loss severity and loss frequency are considered independent
Question 5
For a bank using the advanced measurement approach to measuring operational risk, which of the following brings the greatest 'model risk' to its estimates:
A. Choice of an incorrect distribution for loss event frequencies
B. Aggregation risk, from selecting an incorrect value of estimated correlations between different operational risk estimates
C. Choice of incorrect parameters for loss severity distributions
D. Insufficient number of simulations when building the loss distribution
Solutions:
| Question 1 Answer: B | Question 2 Answer: D | Question 3 Answer: B | Question 4 Answer: D | Question 5 Answer: B |
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