PRM Certification – Exam IV: Case Studies; Standards: Governances: 110 (8004) - PRMIA

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Sample 8004 Exam Questions & Explanations

Practice with real question formats, multiple choice options, and detailed answer explanations for PRMIA 8004.

Question #1 Verified Q&A
A VaR model for managing market risk at Barings Bank in London would most likely have:
A Been used if senior management had ever seen it
B Alerted senior management to the problems before the major losses occurred
C Helped very little as Nick Leeson hid many trades
D Not correctly assessed the risk in Nick Leeson's option trades as they have non-linear price characteristics
Correct Answer: Helped very little as Nick Leeson hid many trades
Question #2 Verified Q&A
Which of the following is FALSE?
A Nick Leeson claimed to be running an arbitrage book
B Nick Leeson also ran the back office for his trading area
C Nick Leeson dealt in complex derivatives lacking transparency of pricing
D SIMEX made inquiries to Barings Bank about large margin calls on its positions
Correct Answer: Nick Leeson dealt in complex derivatives lacking transparency of pricing
Question #3 Verified Q&A
What is (are) the lesson(s) of the Barings' failure?
A All of the above
B Incentive plans have risk management implications
C Front and back offices need to be independent
D Large profits can be an indicator of risk
Correct Answer: All of the above
Question #4 Verified Q&A
Which of the following was a key problem in the Barings Bank case?
A Leeson was executing an arbitrage strategy even though he was not authorized to do so
B Difference in the contract sizes in the OSE and SIMEX
C Having the back office and front office operations under the same person
D The different time zones that the office was trading in
Correct Answer: Having the back office and front office operations under the same person
Question #5 Verified Q&A
Barings failed to recognize that Nick Leeson's losses were increasing because:
A The margin report sent to London did not show the true margin needs
B Leeson ran the front office
C The London office did not ask for any reports
D Leeson hid his trades in a suspense account
Correct Answer: Leeson hid his trades in a suspense account

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Common questions about the PRMIA 8004 certification practice test

How many questions are in the PRMIA 8004 practice exam on ExamsQA?
Our 8004 (PRM Certification – Exam IV: Case Studies; Standards: Governances: 110) practice question bank currently includes 110 verified questions with comprehensive explanations.
Are the 8004 exam practice questions up to date for 2026?
Yes, all PRMIA 8004 practice questions are regularly updated and verified against current exam objectives.
Will the 8004 practice questions help me pass on my first attempt?
The 8004 (PRM Certification – Exam IV: Case Studies; Standards: Governances: 110) question bank is built to mirror the real exam's format and topics, with detailed explanations for every answer so you understand the reasoning — not just memorize responses.
Is there a free demo available for 8004 PRM Certification – Exam IV: Case Studies; Standards: Governances: 110?
Yes, ExamsQA offers free demo questions for the 8004 exam so you can test the interface and question quality before purchasing full access.