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At the Prep4sureGuide offer students PRMIA 8011 practice test questions, and 24/7 support to ensure they do comprehensive preparation for the Credit and Counterparty Manager (CCRM) Certificate Exam (8011) exam. Prep4sureGuide Credit and Counterparty Manager (CCRM) Certificate Exam (8011) practice test material covers all the key topics and areas of knowledge necessary to master the PRMIA Certification Exam.

PRMIA 8011 Credit and Counterparty Manager (CCRM) Certificate Exam is a globally recognized certification that validates a candidate's knowledge and skills in credit and counterparty risk management. 8011 exam focuses on concepts such as credit risk analysis, credit derivatives, and counterparty risk management, including stress testing, collateral management, and default management. The credit and counterparty risk management function has become increasingly important given the growing complexity of financial markets and the need for effective risk management programs.

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PRMIA, or the Professional Risk Managers' International Association, is a global organization dedicated to advancing the risk management profession through education, networking, and advocacy. One of the key offerings of PRMIA is its certification program, which includes the Credit and Counterparty Manager (CCRM) Certificate. The CCRM is a comprehensive exam that tests candidates' knowledge of credit risk and counterparty risk management.

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q168-Q173):

NEW QUESTION # 168
Which of the following is the most accurate description of EPE (Expected Positive Exposure):

• A. The average of the distribution of positive exposures at a specified future date
• B. Weighted average of the future positive expected exposure across a time horizon.
• C. The maximum average credit exposure over a period of time
• D. The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date

Answer: B

Explanation:
When a derivative transaction is entered into, its value generally is close to zero. Over time, as the value of the underlying changes, the transaction acquires a positive or negative value. It is not possible to predict the future value of the transaction in advance, however distributional assumptions can be made and potential exposure can be measured in multiple ways. Of all thepossible future exposures, it is generally positive exposures that are relevant to credit risk because that is the only situation where the bank may lose money from a default of the counterparty.
The maximum (generally a quantile eg, the 97.5th quantile) exposure possible over the time of the transaction is the 'Potential Future Exposure', or PFE.
The average of the distribution of positive exposures at a specified date before the longest trade in the portfolio is called 'Expected Exposure', or EE.
The expected positive exposure calculated as the weighted average of the future positive Expected Exposure across a time horize is called the EPE, or the 'Expected Positive Exposure'.
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date - is the 'fair value', as defined under FAS 157.
Therefore the corect answer is that EPE is the weighted average of the future positive expected exposure across a time horizon.

NEW QUESTION # 169
Which of the following statements are true:
I. A transition matrix is the probability of a security migrating from one rating class to another during its lifetime.
II. Marginal default probabilities refer to probabilities of default in a particular period, given survival at the beginning of that period.
III. Marginal default probabilities will always be greater than the corresponding cumulative default probability.
IV. Loss given default is generally greater when recovery rates are low.

• A. I and IV
• B. I, III and IV
• C. I and III
• D. II and IV

Answer: D

Explanation:
Statement I is incorrect. A transition matrix expresses the probabilities of moving to a given set of ratings at the end of a period (usually one year) conditional upon a given rating at the beginning of the period. It does not make a reference to an individual security and certainly not to the probability of migrating to other ratings during its entire lifetime.
Statement II is correct. Marginal default probabilities are the probability of default in a given year, conditional upon survival at the beginning of that year.
Statement III is incorrect. Cumulative probabilities of default will always be greater than the marginal probabilities of default - except in year 1 when they will be equal.
Statement IV is correct. LGD = 1 - Recovery Rate, therefore a low recovery rate implies higher LGD.

NEW QUESTION # 170
If P be the transition matrix for 1 year, how can we find the transition matrix for 4 months?

• A. By numerically calculating a matrix M such that M x M x M is equal to P
• B. By calculating the cube root of P
• C. By calculating the matrix P x P x P
• D. By dividing P by 3

Answer: A

Explanation:
Assuming time invariance and the Markov property, it is easy to calculate the transition matrix for any time period as P