Pass test with the help of 8010 actual exam materials
Updated: May 26, 2026
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1. An assumption regarding the absence of ratings momentum is referred to as:
A) Herstatt risk
B) Markov property
C) Ratings stability
D) Time invariance
2. Which of the following decisions need to be made as part of laying down a system for calculating VaR:
I. How returns are calculated, eg absoluted returns, log returns or relative/percentage returns II. Whether VaR is calculated based on historical simulation, Monte Carlo, or is computed parametrically III. Whether binary/digital options are included in the portfolio positions IV. How volatility is estimated
A) I and III
B) II and IV
C) I, II and IV
D) All of the above
3. Which of the following statements is NOT true in relation to the recent financial crisis of 2007-08?
A) An intention to diversify from their core activities led all market participants to the same activities, which though appearing diversified at the bank's level, created a concentration risk at the systemic level
B) Central banks had data on the interconnections between institutions, but poor understanding and analysis meant this data was never analyzed
C) The existence of central counterparties could have limited the damage caused by the financial crisis
D) Counterparty risk was difficult togauge as it was impossible to know who the counterparty's counterparties were
4. For a 10 year interest rate swap, what would be the worst time for a counterparty to default (in terms of the maximum likely credit exposure)
A) 10 years
B) 7 years
C) Right after inception
D) 2 years
5. The definition of operational risk per Basel II includes which of the following:
I. Riskof loss resulting from inadequate or failed internal processes, people and systems or from external events II. Legal risk III. Strategic risk IV. Reputational risk
A) I and III
B) I, II, III and IV
C) I and II
D) II and III
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: C | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: C |
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