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PRMIA 8020 Exam Syllabus Topics:

Topic	Details
Topic 1	Risk Governance: This section of the exam measures the skills of Compliance Officers and covers the policies, structures, and processes that define how organizations oversee risk. It explores regulatory compliance, ethical considerations, and corporate governance frameworks to ensure accountability. A key skill measured is applying governance frameworks to organizational risk policies.
Topic 2	Risk Information: This section of the exam measures the skills of Risk Managers and covers the collection, analysis, and communication of risk-related data. It highlights the role of data-driven decision-making in mitigating uncertainties and ensuring compliance. A key skill measured is interpreting risk data for informed decision-making.
Topic 3	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.
Topic 4	Risk Assessment: This section of the exam measures the skills of Financial Risk Analysts and covers methodologies for evaluating risks in different domains, including qualitative and quantitative approaches. It focuses on assessing vulnerabilities, threats, and potential impacts on business operations. A key skill measured is conducting risk impact analysis for financial threats.

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PRMIA ORM Certificate - 2023 Update Sample Questions (Q58-Q63):

NEW QUESTION # 58
What are the objectives of conducting an internal loss investigation?

A. This is determined on a case by case basis by the HR team.
B. Increase understanding of root causes, focus attention on who caused the issue, and improve the quality of scenario analysis and risk assessments.
C. Increase understanding of root causes, focus attention on remediation, and ascertain responsibility for the loss event.
D. Increase understanding of root causes, focus attention on remediation, and improve the quality of scenario analysis and risk assessments.

Answer: D

Explanation:
tep 1: Purpose of Internal Loss Investigations
Internal loss investigations analyze past loss events to identify root causes, improve controls, and enhance risk assessments.
Step 2: Why Option A Is Correct
Root Cause Analysis: Identifying why the loss occurred.
Focus on Remediation: Implementing corrective measures to prevent recurrence.
Scenario Analysis Improvement: Using lessons learned to enhance risk scenario modeling.
Step 3: Why the Other Options Are Incorrect
Option B ("Focus on who caused the issue") → Incorrect because loss investigations are about systemic issues, not assigning blame.
Option C ("Ascertain responsibility for the loss event") → Incorrect because the focus is on process improvements, not individual accountability.
Option D ("Determined by HR on a case-by-case basis") → Incorrect because HR does not dictate risk investigations-risk and compliance functions do.
PRMIA Risk Reference Used:
PRMIA Operational Risk Framework - Emphasizes loss investigations for systemic risk management.
Basel III Risk Governance Standards - Defines loss event analysis as a key risk management tool.

NEW QUESTION # 59
Which of the below is a definition of climate risk?

A. Climate risk refers to the growing impacts of credit risk on the business environment.
B. Climate risk has been moved out of all risk taxonomies due to international agreement.
C. Climate risk refers to change in the business climate during a recession.
D. Climate risk refers to the growing impacts that businesses and our overall society may face due to climate change.

Answer: D

Explanation:
Step 1: Definition of Climate Risk
PRMIA and global financial regulators define climate risk as the financial, operational, and societal risks arising from climate change.
Climate risks impact businesses through physical risks (e.g., floods, wildfires) and transition risks (e.g., regulatory changes, carbon pricing).
Step 2: Why the Other Options Are Incorrect
Option A ("Climate risk has been moved out of all risk taxonomies due to international agreement") Incorrect because climate risk is now a central part of risk taxonomies, as emphasized by PRMIA, Basel III, and TCFD.
Option B ("Climate risk refers to the growing impacts of credit risk on the business environment") Incorrect because credit risk is just one aspect of climate risk, not the full definition.
Option C ("Climate risk refers to change in the business climate during a recession") Incorrect because climate risk is about environmental change, not economic cycles.
PRMIA Risk Reference Used:
PRMIA Climate Risk Guidelines - Defines climate risk as a financial and societal risk due to climate change.
TCFD (Task Force on Climate-Related Financial Disclosures) - Outlines regulatory expectations for climate risk management.
Final Conclusion:
Climate risk involves physical and transition risks from climate change, making Option D the correct answer.

NEW QUESTION # 60
In Operational Resilience, which of the following is not an important measure of whether a Business Service can be considered Critical?

A. Whether a disruption to the provision of the service could harm market integrity.
B. Whether a disruption to the provision of the service could exceed risk appetite.
C. Whether a disruption to the provision of the service could cause material customer detriment.
D. Whether a disruption to the provision of the service could threaten a firm's viability.

Answer: B

Explanation:
Step 1: Definition of a Critical Business Service in Operational Resilience A Critical Business Service is one whose failure could result in severe harm to customers, financial markets, or the firm's viability.
Regulators (e.g., Bank of England, Basel Committee, PRMIA) define three primary factors for identifying critical services:
Customer impact
Market integrity impact
Firm viability impact
Step 2: Why Option C Is Incorrect
Risk appetite is an internal business decision, not an external measure of criticality.
A service can be critical even if its disruption stays within risk appetite.
Criticality is based on external impacts, not just internal risk limits.
Step 3: Why the Other Options Are Correct
Option A ("Material customer detriment") → Correct as customer harm defines critical services.
Option B ("Harm to market integrity") → Correct as market stability is a regulatory priority.
Option D ("Threaten firm viability") → Correct as critical services often determine business survival.
PRMIA Risk Reference Used:
PRMIA Operational Resilience Framework - Defines criteria for critical business services.
Basel Committee Operational Risk Guidelines - Highlights customer, market, and firm viability as resilience factors.
Final Conclusion:
Risk appetite is an internal benchmark, not a measure of critical service designation, making Option C the correct answer.

NEW QUESTION # 61
Under the previous Basel II approach, which was not an approach for operational risk?

A. The Standardized Approach (TSA).
B. Basic Indicator Approach (BIA).
C. Advanced Measurement Approach (AMA).
D. Alternative Measurement Approach (AMA).

Answer: D

Explanation:
Overview of Basel II Approaches for Operational Risk
Basel II introduced three main approaches to calculating capital requirements for operational risk:
Basic Indicator Approach (BIA)
The Standardized Approach (TSA)
Advanced Measurement Approach (AMA)
Why Answer D is Correct
Alternative Measurement Approach (AMA) is not a recognized Basel II approach.
The correct term under Basel II was Advanced Measurement Approach (AMA).
Why Other Answers Are Incorrect
Option
Explanation:
A . Basic Indicator Approach (BIA).
Correct - A simple approach where capital is set as a fixed percentage of gross income.
B . The Standardized Approach (TSA).
Correct - Categorizes operational risk into business lines, each with assigned risk factors.
C . Advanced Measurement Approach (AMA).
Correct - Uses internal models to calculate capital requirements based on loss data, scenario analysis, and risk controls.
PRMIA Reference for Verification
Basel II Framework for Operational Risk (2004)
PRMIA Risk Management Guidelines

NEW QUESTION # 62
For the WorldCom case, what was one of the causes of the failure?

A. The lack of a CRO during the final IPO.
B. Risk models that did not reflect loosened underwriting standards of mortgage originators.
C. A rapid pace of acquisitions and poor integration of acquired companies.
D. Unauthorized trading in derivatives.

Answer: C

Explanation:
Step 1: Understanding the WorldCom Case
WorldCom was one of the largest U.S. telecom companies before its collapse in 2002 due to fraudulent accounting practices and poor risk management.
The company expanded aggressively through acquisitions but failed to integrate them properly, leading to financial mismanagement and accounting fraud.
Step 2: Why Option C is Correct
WorldCom acquired over 60 companies in a short period without proper integration.
This masked financial problems and led to $11 billion in fraudulent accounting adjustments.
PRMIA and risk management frameworks stress that poor integration after rapid acquisitions increases operational and financial risks.
Step 3: Why the Other Options Are Incorrect
Option A ("Risk models and mortgage underwriting") → Incorrect because this describes the 2008 financial crisis, not WorldCom.
Option B ("Lack of a CRO during IPO") → Incorrect because WorldCom was well-established before its fraud-CRO absence was not the main issue.
Option D ("Unauthorized derivatives trading") → Incorrect because WorldCom's failure was due to fraudulent accounting, not derivatives.
PRMIA Risk Reference Used:
PRMIA Corporate Governance Guidelines - Discusses risks of poor post-merger integration.
SEC Investigation on WorldCom (2002) - Identified fraudulent accounting due to failed acquisitions.

NEW QUESTION # 63
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RELIABLE 8020 TEST PATTERN | 8020 CERTIFICATION MATERIALS

Reliable 8020 Test Pattern | 8020 Certification Materials