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PRM Certification - Exam IV: Case Studies Questions and Answers

Question 1

Which of the following CANNOT be counted as a reason why LTCM was given a rescue package and not left to default?

Options:

A.

Many of the banks in the rescue consortium were among LTCM's counterparties

B.

Some of the banks in the rescue consortium were LTCM investors

C.

Untimely unwinding of some LTCM positions would lead to large market fluctuations and possible turmoil

D.

The consortium wanted to keep this out of the regulators' eyes

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Question 2

PRMIA Governance Principles

Options:

A.

must be adhered to by all PRMIA member organizations

B.

is a set of recommendations based on research and best practice

C.

must be adhered to by all PRM charter holders

D.

must be adhered to by all financial firms that are PRMIA members

Question 3

MGRM's losses due to "stacking" started to increase when

Options:

A.

the oil market went from contango to backwardation

B.

the oil market went from backwardation to contango

C.

the oil market went from weak backwardation to strong backwardation

D.

the oil market went from strong contango to weak contango