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The PRMIA Operational Risk Management (ORM) Certificate is designed to deliver a deep, practical understanding of operational risk management frameworks and measurement methodologies in financial institutions.  Successful candidates will be better prepared to implement meaningful risk assessment initiatives, produce useful risk management information and understand basic modeling techniques for operational risk measurement.

ORM Certificate holders have demonstrated knowledge of operational risk management concepts and practices. It is intended for professionals working in all risk-related roles within an organization.  The ORM Certificate is relevant to all risk-related roles in financial services, in particular operational risk staff, financial controllers, operations and technology managers, and compliance and legal officers. A grounding in operational risk management techniques is increasingly important for front line staff from a process and conduct perspective in their dealings with clients and market counterparts.

Exam Format: the exam consists of 60 questions of multiple choice

Exam Duration: 2 hours

Mode: the exam is online and also computer-based

Location: Pearson VUE testing center.

Language: English only

Passing Score: in order to pass the exam, almost you need to achieve 60% or higher.

Note: in case you did not pass the exam, you need to wait 90 days in order to retake it.

The purpose of the ORM examination is to assess the current knowledge level of the ORM syllabus domain areas in relation to the global standard expected of an operational risk manager. Knowledge is assessed by multiple-choice test questions that make up the examination. The table below provides a summary of the eight major domain areas and how the ORM examination assesses these domains. 

A risk analyst attempting to model the tail of a loss distribution using EVT divides the available dataset into blocks of data, and picks the maximum of each block as a data point to consider.

Which approach is the risk analyst using?

A.Block Maxima approach

B.Peak-over-thresholds approach

C.Expected loss approach

D.Fourier transformation

Answer : A

Which of the following is not a limitation of the univariate Gaussian model to capture the codependence structure between risk factros used for VaR calculations?

A.The univariate Gaussian model fails to fit to the empirical distributions of risk factors, notably their fat tails and skewness.

B.Determining the covariance matrix becomes an extremely difficult task as the number of risk factors increases.

C.It cannot capture linear relationships between risk factors.

D.A single covariance matrix is insufficient to describe the fine codependence structure among risk factors as non-linear dependencies or tail correlations are not captured.

Answer : C

As the persistence parameter under EWMA is lowered, which of the following would be true:

A.The model will react slower to market shocks

B.The model will react faster to market shocks

C.High variance from the recent past will persist for longer

D.The model will give lower weight to recent returns

Answer : B

Which of the following will be a loss not covered by operational risk as defined under Basel II?

A.Earthquakes

B.Fat finger losses

C.Systems failure

D.Strategic planning

Answer:D

Which of the following cannot be used as an internal credit rating model to assess an individual borrower? 

A.Distance to default model

B.Probit model

C.Logit model

D.Altman's Z-score

Answer:A

Which of the following credit risk models includes a consideration of macro economic variables such asunemployment, balance of payments etc to assess credit risk?

A.KMV's EDF based approach

B.The CreditMetrics approach

C.The actuarial approach

D.CreditPortfolio View

Answer:D