Trusted 8011 Exam Resource, 8011 Exam Reviews

The 8011 training pdf provided by Prep4sureExam is really the best reference material you can get from anywhere. The experts of Prep4sureExam are trying their best to develop and research the high quality and 8011 exam preparation material to help you strengthen technical job skills. When you complete your payment, you will receive an email attached with 8011 practice pdf, then you can instantly download it and install on your phone or computer for study. The high efficiency preparation by 8011 exam dumps can ensure you 100% pass with ease.

Our 8011 learning prep boosts the self-learning, self-evaluation, statistics report, timing and test stimulation functions and each function plays their own roles to help the clients learn comprehensively. The self-learning and self-evaluation functions of our 8011 guide materials help the clients check the results of their learning of the 8011 Study Materials. The timing function of our 8011 training quiz helps the learners to adjust their speed to answer the questions and keep alert and our study materials have set the timer.

>> Trusted 8011 Exam Resource <<

PRMIA 8011 Exam Reviews & 8011 New Dumps Sheet

Our website is considered to be the most professional platform offering 8011 practice materials, and gives you the best knowledge of the 8011 practice materials. Passing the exam has never been so efficient or easy when getting help from our Credit and Counterparty Manager (CCRM) Certificate Exam practice materials. There are also free demos you can download before placing the orders. Taking full advantage of our Credit and Counterparty Manager (CCRM) Certificate Exam practice materials and getting to know more about them means higher possibility of winning. And our website is a bountiful treasure you cannot miss.

PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q209-Q214):

NEW QUESTION # 209
Which of the following statements is correct?

A. Market liquidity risk is idiosyncratic while funding liquidity risk is not
B. Funding liquidity risks present themselves in the form of an adverse market impact on prices from a trade
C. Dynamic simulations of liquidity needs require an assumption of counterparty risk remaining constant
D. Market liquidity risks present themselves in the form of higher bid offer spreads

Answer: D

Explanation:
Simulations of liquidity needs can be of various types: historical simulations, where the current positions are subjected to the kind of liquidity shocks experienced in the past; static simulations, where a static view of current positions, counterparty credit position, and the business is considered; and dynamic simulations where all factors are dynamically changed including counterparty credit standing, changes to the current portfolio and behavioural aspects of the business. Choice 'b' is incorrect as dynamic simulations require no such assumptions.
Liquidity risk is often thought of in terms of market liquidity risk and funding liquidity risk. Market liquidity risk relates to the the liquidity for a particular type of asset drying up. For example, during the 2007-2009 crisis a large number of corporate bonds and structured products became extremely illiquid. Market liquidity risk manifests itself in the form of higher bid offer spreads, higher pricde impact, and a reduction in the normal market size (ie, the 'normal' size of a trade for which a dealer quote is valid for). Therefore Choice 'd' is correct. Similarly, Choice 'a' is incorrect as adverse price impact results from market liquidity risk and not funding liquidity risk.
Market liquidity risk applies to the entire market and all its participants. It is not idiosyncratic. Therefore Choice 'c' is incorrect too. Funding liquidity risk on the other hand applies to an individual institution that is under liquidity stress in the sense of not being able to meet its obligations such as margin or collateral calls because of a lack of liquid assets. Thus it is funding liquidity that is idiosyncratic. Market liquidity risk often leads to funding liquidity risks materializing as firms are unable to get to the funds they were relying upon due to assets becoming illiquid.

NEW QUESTION # 210
Assuming all other factors remain the same, an increase in the volatility of the returns on the assets of a firm causes which of the following outcomes?

A. A decrease in the value of the implicit put in in the debt of the firm
B. A decrease in the value of the non-callable debt issued by the firm
C. An increase in the value of the callable debt of the firm
D. An increase in the value of the equity of the firm

Answer: B

Explanation:
Some parts of this question draw upon contingent claims framework to the value of a firm. According to this framework, the relationship between the debt and equity holders of a firm can be viewed as follows: The equity holders have a call option on the assets of the firm with a strike price equal to the value of the debt, and the debt holders have sold them this call. This is so because should the value of the assets of the firm fall below the value of the debt, the equity holders can walk away by handing over the assets to the debt holders in full extinguishment of their claims. If the value of the firm's assets is greater than the value of debt, the equity holders will exercise their call option. At the same time, it is also possible to view the debtholders as holding an asset and having sold a put on the assets of the firm with a strike price equal to the value of the debt. If the value of the assets of the firm were to fall below the value of the debt, they will end up buying the assets at a price equal to the value of the debt.
An increase in the volatility of returns on the assets of a firm increases the volatility of the assetvalue. This means the likelihood that the asset value will go below the value of the debt of the firm will increase. Callable debt can be considered to be a summation of two separate securities: a regular debt, for which the firm pays interest and receives a principal loan; and a call option that the debt holders have sold to the firm allowing the firm to buy back the debt. In return, the firm pays an implied 'premium' to the debt holders who have agreed to buy the callable debt. Therefore the total payments by the company to callable debt holders is equal to the interest payments plus the premium payment for the option. An increase in asset volatility will increase the value of this option as it is likely that the assets will increase in value, and strengthen the company's credit, and lower its spread at which time it would like to repay the debt and refinance/roll over at the new lower rate. Therefore an increase in volatility will increase the 'premium' demanded by the callable debt holders, thereby increasing the total yield and lowering the value of the callable debt. Therefore Choice 'b' (An increase in the value of the callable debt of the firm) is incorrect.
An increase in asset volatility will decrease the value of the firm as it is now riskier than before (higher standard deviation, same expected returns). Therefore Choice 'a' (An increase in the value of the equity of the firm) is false too.
The value of the implicit put in the debt of the firm will increase and not decrease as the volatility of the underlying assets increases. Therefore Choice 'c' (A decrease in the value of the implicit put in in the debt of the firm) is incorrect too.
Choice 'd' (A decrease in the value of the non-callable debt issued by the firm) is correct because higher asset volatility will increase the riskiness of the company's debt, making the required yield higher and decreasing its value.

NEW QUESTION # 211
The CDS quote for the bonds of Bank X is 200 bps. Assuming a recovery rate of 40%, calculate the default hazard rate priced in the CDS quote.

A. 3.33%
B. 2.00%
C. 5.00%
D. 0.80%

Answer: A

Explanation:
Hazard rate x Loss given default = CDS quote. In other words, Hazard rate x (1 - recovery rate) = CDS quote.
We can therefore calculate the hazard rate for this problem as 200 bps/(1 - 40%) = 3.33%.

NEW QUESTION # 212
If the full notional value of a debt portfolio is $100m, its expected value in a year is $85m, and the worst value of the portfolio in one year's time at 99% confidence level is $60m, then what is the credit VaR?

A. $15m
B. $40m
C. $25m
D. $60m

Answer: C

Explanation:
Credit VaR is the difference between the expected value of the portfolio and the value of the portfolio at the given confidence level. Therefore the credit VaR is $85m - $ 60m = $25m. Choice 'b' is the correct answer.
Note that economic capital and credit VaR are identical at a risk horizon of one year. Therefore if the question asks for economic capital, the answer would be the same.
[Again, an alternative way to look at this is to consider the explanation given in III.B.6.2.2: Credit Var = Q(L)
- EL where Q(L) is the total loss at a given confidence interval, and EL is the expected loss. In this case Q(L)
- $100-$60 = $40, and EL = $100-$85=$15. Therefore Credit VaR = $40-$15=$25.]

NEW QUESTION # 213
If the default hazard rate for a company is 10%, and the spread on its bonds over the risk free rate is 800 bps, what is the expected recovery rate?

A. 20.00%
B. 8.00%
C. 0.00%
D. 40.00%

Answer: A

Explanation:
The recovery rate, the default hazard rate (also called the average default intensity) and the spread on debt are linked by the equation Hazard Rate = Spread/(1 - Recovery Rate). Therefore, the recovery rate implicit in the given data is = 1 - 8%/10% = 20%.

NEW QUESTION # 214
......

Prep4sureExam IT Certification has years of training experience. Prep4sureExam PRMIA 8011 exam training materials is a reliable product. IT elite team continue to provide our candidates with the latest version of the 8011 exam training materials. Our staff made great efforts to ensure that you always get good grades in examinations. To be sure, Prep4sureExam PRMIA 8011 Exam Materials can provide you with the most practical IT certification material.

8011 Exam Reviews: https://www.prep4sureexam.com/8011-dumps-torrent.html

No Pass, No Pay, PRMIA Trusted 8011 Exam Resource We request service staff "be nice, be patient, be careful, be responsible" to every candidate, PRMIA Trusted 8011 Exam Resource You will find that learning is becoming interesting and easy, Very easy to use and perfectly assist you in PRMIA 8011 exam preparation, You can correct the mistakes and get the idea of 8011 exam more clearly.

For the elbow and knee controls to work, you 8011 must assign them to the arm and leg skeletons with a pole vector constraint, TheAccuWeather.com app appears at the top of Trusted 8011 Exam Resource the page so you can see the current date, time, and weather conditions at a glance.

Free PDF Quiz 2025 PRMIA Useful 8011: Trusted Credit and Counterparty Manager (CCRM) Certificate Exam Exam Resource

No Pass, No Pay, We request service staff "be nice, be patient, 8011 Exam Reviews be careful, be responsible" to every candidate, You will find that learning is becoming interesting and easy.

Very easy to use and perfectly assist you in PRMIA 8011 Exam Preparation, You can correct the mistakes and get the idea of 8011 exam more clearly.