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Questions # 1:

As a result of the US government's intervention, which of the following is true?

Options:

A.

The cost of borrowing for Fannie Mae and Freddie Mac should decline because the government will be standing behind their debts and the buying and selling of mortgage debt will continue

B.

The cost of borrowing for house buyers will rise because of the risk premium now built into the cost of such a government guarantee

C.

The systemic risks still remain in the housing market because it increases the US government's debt

D.

Foreign Central Banks will continue to sell their holdings of Fannie Mae and Freddie Mac securities

Expert Solution
Questions # 2:

Which US regulatory authority resolved the restructuring of Washington Mutual?

Options:

A.

The Office of Thrift Supervision

B.

Federal Deposit Insurance Corporation

C.

The Federal Reserve Bank

D.

None of the above

Expert Solution
Questions # 3:

For the sentence

"The organization should have at its disposal employees who have adequate _________, ________ and _______ to perform the tasks assigned to them",

Choose the correct combination of words from the following options:

Options:

A.

knowledge, skills, expertise

B.

experience, skills, previous successes

C.

risk appetite, knowledge, expertise

D.

track record, expertise, skills

Expert Solution
Questions # 4:

Select the one correct statement relative to Barings Bank.

Options:

A.

Proprietary and agency trading were combined and therefore did not increase risk.

B.

Proprietary and agency trading were separate and therefore did not increase risk.

C.

Proprietary and agency trading were combined and therefore did increase risk.

D.

Proprietary and agency trading were separate and did increase risk.

Expert Solution
Questions # 5:

Mary Jones wants the Bylaws of PRMIA to be changed so that people can't join PRMIA unless they meet a set of criteria she has devised with her colleagues. She can do this by getting which of the following approvals:

Options:

A.

The Board of Directors, but only if the Blue Ribbon Panel affirms the change

B.

The Board of Directors and a majority of the Members

C.

The Board of Directors alone

D.

34 of all Members

Expert Solution
Questions # 6:

Every PRMIA chapter is designed to serve the local needs of members, so they often have fairly independent planning structures and ideas. According to the PRMIA Bylaws, Regional Chapters and Regional Directors:

Options:

A.

Can have their own offices, bylaws and regulations provided they do not conflict with those of PRMIA

B.

Can have meetings that only local members are allowed to attend

C.

Can sign contracts on behalf of PRMIA without prior approval from the Board of Directors

D.

All of the above

Expert Solution
Questions # 7:

With a PRMIA member's need to reconcile their internal and external responsibility to perform their work in an independent and appropriate fiduciary manner, which of the following options must be taken into consideration when performing risk management duties?

Options:

A.

Internal controls of the organization, and the local regulator

B.

Internal controls, and the expectations of stakeholders, shareholders, and the general public

C.

The local regulator, internal controls, and shareholders

D.

Only the internal controls and compliance standards

Expert Solution
Questions # 8:

The early 2003 trading strategy of China Aviation oil was

Options:

A.

to buy calls and sell puts

B.

to buy puts and sell calls

C.

to sell puts and buy calls

D.

to sell calls and buy puts

Expert Solution
Questions # 9:

The problems at Bankgesellschaft Berlin can best be characterized as failures related to:

Options:

A.

Market Risk

B.

Credit Risk

C.

Operational Risk

D.

Both B and C

Expert Solution
Questions # 10:

Which of the following CANNOT be counted as a reason why LTCM was given a rescue package and not left to default?

Options:

A.

Many of the banks in the rescue consortium were among LTCM's counterparties

B.

Some of the banks in the rescue consortium were LTCM investors

C.

Untimely unwinding of some LTCM positions would lead to large market fluctuations and possible turmoil

D.

The consortium wanted to keep this out of the regulators' eyes

Expert Solution
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