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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 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 3	Introduction: This section of the exam measures the skills of Risk Analysts and covers fundamental concepts of risk governance, management, and assessment. It introduces key principles, regulatory frameworks, and industry best practices for identifying and addressing risks. A key skill measured is understanding the foundational principles of risk management.
Topic 4	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 5	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.
Topic 6	Insurance Mitigation: This section of the exam measures the skills of Insurance Risk Managers and covers strategies for transferring risk through insurance and other financial instruments. It focuses on risk transfer mechanisms, policy structuring, and claims management. A key skill measured is assessing risk transfer options through insurance.
Topic 7	Case Studies: This section of the exam measures the skills of Business Risk Consultants and covers real-world applications of risk management concepts. It examines case studies on risk governance, assessment, and mitigation strategies across different industries. A key skill measured is analyzing historical risk events for strategic insights.

PRMIA ORM Certificate - 2023 Update Sample Questions (Q28-Q33):

NEW QUESTION # 28
Two of the four key resources that are regarded as critical to maintain confidence and calibrate Risk Appetite to are?

A. Net earnings and capital.
B. Quality human resources and reputation.
C. Capital expenditure and liquidity.
D. Strong regulatory assessment and net earnings.

Answer: A

Explanation:
Key Resources for Calibrating Risk Appetite
Risk appetite defines how much risk an organization is willing to accept to achieve its objectives.
Two of the most critical resources for maintaining confidence and setting risk appetite are net earnings and capital.
Why Net Earnings and Capital are Critical
Net earnings reflect profitability and financial stability, influencing risk-taking capacity.
Capital ensures that the institution can absorb losses and meet regulatory requirements.
Basel III emphasizes capital adequacy as a core measure of financial resilience.
Why Answer B is Correct
Net earnings support operational stability, while capital determines how much risk an institution can bear.
Both are used to define and calibrate risk appetite levels.
Why Other Answers Are Incorrect
Option
Explanation:
A . Capital expenditure and liquidity.
Incorrect - Capital expenditure is an investment measure, not a direct risk appetite determinant.
C . Strong regulatory assessment and net earnings.
Incorrect - Regulatory assessments are important but do not directly set risk appetite.
D . Quality human resources and reputation.
Incorrect - HR and reputation are important for governance but do not directly influence risk capital and earnings stability.
PRMIA Reference for Verification
PRMIA Risk Appetite Framework
Basel III Capital and Earnings Management Guidelines

NEW QUESTION # 29
In operational resilience, what is impact tolerance?

A. Impact tolerance is a firm's risk appetite statement.
B. Impact tolerance is a firm's risk capacity statement.
C. Impact tolerance is a firm's tolerance for disruption to a particular business process.
D. Impact tolerance is a firm's tolerance for disruption to a particular business service.

Answer: D

Explanation:
Impact Tolerance is a key concept in Operational Resilience, defined as the ability of a firm to withstand, respond to, and recover from disruptions. According to PRMIA and global regulatory frameworks (such as the Bank of England's Operational Resilience Framework), impact tolerance is specifically tied to business services rather than processes.
Step 1: Defining Impact Tolerance
Impact tolerance is the maximum acceptable level of disruption to an important business service, beyond which there would be intolerable harm to customers, financial markets, or regulatory obligations.
It is not the same as risk appetite or risk capacity, as those deal with broader organizational risk exposure.
Step 2: Why Business Services Matter
PRMIA defines business services as end-to-end services delivered to clients and stakeholders, such as payments processing, trade execution, or loan approvals.
Disruptions to these services directly impact customers and financial stability, making business service resilience the core focus of impact tolerance.
Step 3: Why the Other Options Are Incorrect
Option A ("tolerance for disruption to a particular business process")
Incorrect because impact tolerance applies to services, not just internal processes.
Option C ("a firm's risk appetite statement")
Incorrect because risk appetite focuses on how much risk a firm is willing to take, while impact tolerance is about surviving disruptions.
Option D ("a firm's risk capacity statement")
Incorrect because risk capacity is the maximum level of risk a firm can bear, which is broader than business service disruptions.
PRMIA Risk Reference Used:
PRMIA Operational Resilience Guidelines - Defines impact tolerance as a service-based metric.
Bank of England's Operational Resilience Framework - Establishes impact tolerance as a limit on business service disruption.
Final Conclusion:
Impact tolerance focuses on business services, not just internal processes or risk appetite, making Option B the correct answer.

NEW QUESTION # 30
When a single operational risk event leads to losses in multiple business lines or impacts across several event types, how should these linked losses be treated?

A. Either allocate entire loss to the business line for which the loss is greatest or pro-rate the loss across the affected business line.
B. Each business line should take it's own discretion as to how the losses are treated.
C. Allocate entire loss to the business line for which the loss is greatest.
D. Pro-rate the loss across the affected business line.

Answer: A

Explanation:
Step 1: Understanding Linked Losses in Operational Risk
In operational risk events, a single event can impact multiple business lines or event types (e.g., IT failure affecting retail banking and wealth management).
Proper loss attribution is important for accurate risk reporting and regulatory compliance under Basel III.
Step 2: Why Option C is Correct
Basel III and PRMIA guidance allow institutions flexibility in how to allocate linked losses:
Entire loss can be allocated to the business line with the largest loss impact for simplified reporting.
Loss can be pro-rated across affected business lines for more accurate attribution.
Step 3: Why the Other Options Are Incorrect
Option A ("Allocate entire loss to the business line with the greatest loss") → Partially correct, but not always required-some firms prefer pro-rating.
Option B ("Pro-rate the loss") → Partially correct, but allocating to the largest impacted business line is also acceptable.
Option D ("Each business line decides how to treat losses") → Incorrect because loss allocation should follow a defined policy, not business line discretion.
PRMIA Risk Reference Used:
Basel III Operational Risk Framework - Discusses loss attribution for multi-line impact events.
PRMIA Loss Event Management Guidelines - Supports both full allocation and pro-rating.
Final Conclusion:
Firms can either allocate the full loss to the most impacted business line or pro-rate it across affected lines, making Option C the correct answer.

NEW QUESTION # 31
In order for a KRI to be effective it must be:

A. Quantitative, Repeatable and Efficient.
B. Qualitative, Consistent Efficient & Repeatable.
C. Quantitative and Qualitative. Consistent. Efficient & Repeatable.
D. Quantitative, Consistent and Comparable. Efficient & Repeatable

Answer: C

Explanation:
Definition of an Effective Key Risk Indicator (KRI)
A KRI is a metric used to identify, measure, and monitor emerging risks.
To be effective, KRIs must be both quantitative and qualitative, allowing for a comprehensive risk view.
Key Characteristics of Effective KRIs
Quantitative - Uses numerical data for trend analysis.
Qualitative - Incorporates expert judgment and scenario-based insights.
Consistent - Maintains uniform definitions across reporting periods.
Efficient & Repeatable - Must be easily measured and consistently reported.
Why Other Answers Are Incorrect
Option
Explanation:
B . Qualitative, Consistent, Efficient & Repeatable.
Incorrect - Excludes quantitative aspects, which are essential for KRIs.
C . Quantitative, Consistent, Comparable, Efficient & Repeatable.
Incorrect - While comparison is useful, qualitative factors are missing, making this answer incomplete.
D . Quantitative, Repeatable and Efficient.
Incorrect - Lacks qualitative insights and consistency as key factors for KRIs.
PRMIA Reference for Verification
PRMIA Risk Indicator Guidelines
Basel Committee's Principles on Risk Data and KRI

NEW QUESTION # 32
Governance can be defined as which of the following?

A. Governance is being replaced by management in all firms that are regulated.
B. Governance is a structure specifying the ways in which reporting is made to the primary regulator.
C. Governance is a structure specifying the daily operation of a firm.
D. Governance is a structure specifying the policies, principles, and procedures for making decisions about corporate direction.

Answer: D

Explanation:
Definition of Governance
Governance refers to the framework of policies, principles, and processes used to guide corporate decision-making and strategic direction.
It ensures accountability, transparency, and risk oversight within an organization.
Key Elements of Governance
Risk oversight - Ensuring risks are properly identified and managed.
Accountability structures - Defining roles and responsibilities.
Decision-making frameworks - Establishing policies for long-term corporate success.
Why Other Answers Are Incorrect
Option
Explanation:
A . Governance is a structure specifying the daily operation of a firm.
Incorrect - Governance focuses on high-level corporate oversight, not day-to-day operations.
B . Governance is a structure specifying the ways in which reporting is made to the primary regulator.
Incorrect - Governance is broader than just regulatory reporting.
C . Governance is being replaced by management in all firms that are regulated.
Incorrect - Governance and management are separate but complementary; governance provides oversight, while management executes strategy.
PRMIA Reference for Verification
PRMIA 10 Principles of Good Governance

NEW QUESTION # 33
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8020 Actual Tests - 8020 Certification Dump

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