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Updated: Sep 01, 2026
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| Certification Vendor: | PRMIA |
|---|---|
| Exam Name: | PRM Certification - Exam III: Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP (2015 Edition) |
| Exam Number: | 8008 |
| Exam Format: | Multiple choice |
| Related Certifications: | PRM Exam IV PRM Exam I PRM Exam II |
| Available Languages: | English |
| Recommended Training: | PRMIA Official Study Resources |
| Exam Registration: | PRMIA Certification Registration |
| Sample Questions: | PRMIA 8008 Sample Questions |
| Exam Way: | Computer-based exam (online or authorized test centers) |
| Pre Condition: | Typically requires completion of PRM Exam I and PRM Exam II before attempting Exam III as part of PRM designation requirements. |
| Official Syllabus URL: | https://www.prmia.org |
| Section | Objectives |
|---|---|
| Topic 1: Asset-Liability Management (ALM) | - Interest rate risk in the banking book (IRRBB) - Liquidity risk management |
| Topic 2: Risk Management Frameworks | - Risk measurement and reporting frameworks - Enterprise risk management principles
|
| Topic 3: Credit Risk | - Credit risk measurement and modeling
|
| Topic 4: Counterparty Risk | - Derivatives credit risk considerations - Netting and collateral management - Counterparty credit exposure |
| Topic 5: Funds Transfer Pricing (FTP) | - FTP methodologies - Internal pricing of funds and liquidity allocation |
| Topic 6: Market Risk | - Interest rate, equity, FX, and commodity risk - Market risk measurement techniques
|
| Topic 7: Operational Risk | - Operational risk types and sources - Operational risk management techniques
|
Question 1
Under the standardized approach to determining operational risk capital, operations risk capital is equal to:
A. 15% of the average gross income (considering only the positive years) of the past three years
B. a fixed percentage (different for each business line) of the gross income of the eight specified business lines, averaged over three years
C. a fixed percentage of the latest gross income of the bank
D. a varying percentage, determined by the national regulator, of the gross revenue of each of the bank's business lines
Question 2
Pick underlying risk factors for a position in an equity index option:
I. Spot value for the index
II. Risk free interest rate
III. Volatility of the underlying
IV. Strike price for the option
A. I and IV
B. I, II and III
C. II and II
D. All of the above
Question 3
Which of the following is true in relation to the application of Extreme Value Theory when applied to operational risk measurement?
I. EVT focuses on extreme losses that are generally not covered by standard distribution assumptions II. EVT considers the distribution of losses in the tails III. The Peaks-over-thresholds (POT) and the generalized Pareto distributions are used to model extreme value distributions IV. EVT is concerned with average losses beyond a given level of confidence
A. I, II and IV
B. II and III
C. I and IV
D. I, II and III
Question 4
The backtesting of VaR estimates under the Basel accord requires comparing the ex-ante VaR to:
A. hypothetical profit and loss keeping the positions constant
B. ex-ante VaR calculated for the subsequent periods
C. realized profit and loss for the period
D. the Basel accord does not require banks to backtest VaR estimates
Question 5
The generalized Pareto distribution, when used in the context of operational risk, is used to model:
A. Unexpected losses
B. Tail events
C. Average losses
D. Expected losses
Solutions:
| Question 1 Answer: B | Question 2 Answer: B | Question 3 Answer: D | Question 4 Answer: C | Question 5 Answer: B |
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