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PRMIA 8020 Exam Questions
- Topic 1: 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 2: 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 3: 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 4: 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 5: 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 6: Risk Modeling: This section of the exam measures the skills of Quantitative Risk Analysts and covers mathematical and statistical techniques used to predict risk scenarios. It explores model development, validation, and application in financial and operational risk management. A key skill measured is applying statistical models for risk prediction.
- Topic 7: 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 8: 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.
Free PRMIA 8020 Exam Actual Questions
Note: Premium Questions for 8020 were last updated On Feb. 21, 2025 (see below)
In relation to financial crime. OFAC is a definition for which organization?
Step 1: Understanding OFAC
OFAC (Office of Foreign Assets Control) is a U.S. Treasury Department agency responsible for enforcing economic and trade sanctions based on U.S. foreign policy and national security goals.
It prevents financial crime by restricting transactions with sanctioned individuals, entities, and countries.
Step 2: Role of OFAC in Financial Crime Prevention
OFAC administers sanctions to prevent money laundering, terrorism financing, and other illicit activities.
Financial institutions must comply with OFAC regulations to avoid heavy fines and reputational damage.
PRMIA's Financial Crime Risk Guidelines emphasize the importance of OFAC compliance in risk management.
Step 3: Why the Other Options Are Incorrect
Option A ('Office of Financial Asset Control') -- Incorrect wording; OFAC deals with foreign assets, not just financial assets.
Option B ('Office of Foreigner and Other Control') -- OFAC does not regulate foreigners broadly; it targets specific foreign assets and transactions.
Option C ('Office for Asset Control') -- Missing 'Foreign', which is critical to OFAC's function.
PRMIA Risk Reference Used:
PRMIA Financial Crime Risk Management Guidelines -- Emphasizes regulatory compliance with OFAC.
PRMIA Compliance and Sanctions Risk Standards -- Stresses the role of OFAC in preventing illicit financial activities.
Final Conclusion:
OFAC stands for the Office of Foreign Assets Control, making Option D the correct answer.
Ideally, the facilitator of a risk assessment workshop should:
Step 1: Role of a Risk Assessment Facilitator
The facilitator's main role is to guide discussions without bias, ensuring objective risk identification.
PRMIA's Risk Governance Framework highlights neutral facilitation as key to effective risk workshops.
Step 2: Why Option C Is Correct
Objectivity ensures unbiased risk assessment.
Expressing personal opinions can influence risk ratings, leading to distorted outcomes.
Step 3: Why the Other Options Are Incorrect
Option A ('Guide the workshop toward a pre-determined conclusion')
Incorrect because risk workshops should discover risks, not confirm pre-set beliefs.
Option B ('Attendees can override results')
Incorrect as risk results should be evidence-based, not subject to override.
Option D ('Attend via video connection')
Incorrect as facilitators must engage actively, making remote facilitation less effective.
PRMIA Risk Reference Used:
PRMIA Risk Governance Framework -- Stresses objectivity in risk assessment facilitation.
PRMIA Risk Identification Best Practices -- Encourages unbiased workshops.
Final Conclusion:
Facilitators must remain neutral and objective, making Option C the correct answer.
The DORA act's full name is which of the following?
Definition of DORA
The Digital Operational Resilience Act (DORA) is a regulation by the European Union (EU) aimed at strengthening the digital resilience of financial institutions.
It establishes a regulatory framework for managing information and communication technology (ICT) risks in the financial sector.
Key Objectives of DORA
Ensures that financial institutions can withstand, respond to, and recover from cyber threats and ICT-related disruptions.
Introduces standards for risk management, incident reporting, and third-party ICT risk oversight.
Why Other Answers Are Incorrect
Option
Explanation
A . Domain for Operational Risk Act.
Incorrect -- No such regulation exists under this name.
B . Digital Operational Risk Act.
Incorrect -- The official name is Digital Operational Resilience Act (DORA).
C . Daily Operational Resilience Act.
Incorrect -- DORA is not focused on daily operations but rather long-term digital resilience.
PRMIA Reference for Verification
PRMIA Risk Governance & Digital Resilience Standards
European Commission's Official DORA Regulation
Governance can be defined as which of the following?
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
In order for a KRI to be effective it must be:
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
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Geraldine
25 days agoLorita
26 days ago