Free PRMIA 8010 Practice Exams Questions 2026 - TheExamsLabs

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Total 242 Questions | Updated On: May 22, 2026

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Question 1

The frequency distribution for operational risk loss events can be modeled by which of the followingdistributions:I. The binomial distributionII. The Poisson distributionIII. The negative binomial distributionIV. The omega distribution

A : I, II and III

B : I and III

C : I, III and IV

D : I, II, III and IV

Answer: A

Question 2

Under thebasic indicator approach to determining operational risk capital, operational risk capital is equal to:

A : 15% of the average gross income (considering only the positive years) of the past three years

B : 15% of the average net income (considering only thepositive years) of the past three years

C : 25% of the average gross income (considering only the positive years) of the past three years

D : 15% of the average gross income of the past five years

Answer: A

Question 3

There are two bonds in a portfolio, each with a marketvalue of $50m. The probability of default of the two bonds over a one year horizon are 0.03 and 0.08 respectively. If the default correlation is zero, what is the one year expected loss on this portfolio?

A : $11m

B : $5.26m

C : $5.5m

D : $1.38m

Answer: C

Question 4

Under the KMV Moody's approach to calculating expectingdefault frequencies (EDF), firms' default on obligations is likely when:

A : expected asset values one year hence are below total liabilities

B : asset values reach a level below short term debt

C : asset values reach a level below totalliabilities

D : asset values reach a level between short term debt and total liabilities

Answer: D

Question 5

The key difference between 'top down models' and 'bottom up models' foroperational risk assessment is:

A : Top down approaches to operational risk are based upon an analysis of key risk drivers, while bottom up approaches consider causality in risk scenarios.

B : Bottom up approaches to operational risk are based upon an analysis of key risk drivers, while top down approaches consider causality in risk scenarios.

C : Bottom up approaches to operational risk calculate the implied operational risk using available data such as income volatility, capital etc; while top down approaches use causal factors, risk drivers and other factors to get an aggregated estimate of risk

D : Top down approaches to operational risk calculate the implied operational risk using available data such as income volatility, capital etc; while bottom up approaches use causal factors, risk drivers and other factors to get an aggregated estimate of risk.

Answer: D

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Total 242 Questions | Updated On: May 22, 2026

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