You have to pass the APRM exam to receive the certification from PRMIA. To increase the effectiveness of your study and make you familiar with the actual exam pattern, we have prepared this PRMIA Associate Professional Risk Manager sample questions. Our Sample PRMIA Associate Professional Risk Manager Practice Exam will give you more insight about both the type and the difficulty level of the questions on the PRMIA Associate PRM exam.
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PRMIA Associate Professional Risk Manager Sample Questions:
01. Which statement best captures the purpose of hedge accounting (high level)?
a) To eliminate all market risk from the firm’s balance sheet permanently
b) To ensure hedges are always cheaper than self-insurance
c) To better align the timing of hedge gains/losses with the hedged item’s accounting impact
d) To guarantee that all hedges generate positive cash flow
02. Two portfolios have the same expected return. Portfolio X has lower volatility than Portfolio Y. Which is most accurate?
a) Portfolio X is preferred because it dominates on risk for the same return
b) Neither can be preferred without knowing the inflation rate
c) Portfolio Y is preferred because volatility measures only upside variability
d) Portfolio Y is preferred because higher volatility always implies higher expected return
03. Which instrument most directly provides a firm with protection against rising interest rates on a future borrowing?
a) Short position in a currency option unrelated to the loan currency
b) Pay-fixed / receive-floating interest rate swap (or a rate cap)
c) Receive-fixed / pay-floating interest rate swap
d) Long position in a dividend futures contract
04. A commercial borrower’s revenue depends heavily on a single customer. What risk driver is most directly highlighted?
a) Basis risk in the borrower’s hedges
b) Dividend risk in the borrower’s equity holdings
c) Repo rollover risk in the interbank market
d) Concentration risk in the borrower’s cash flows
05. If a firm’s hurdle rate for RAROC is 12%, which proposal is most attractive from a risk-adjusted perspective?
a) RAROC 14% with moderate capital consumption
b) RAROC 12% only if gross revenue is high
c) RAROC 8% because growth is always prioritized
d) RAROC 10% with very low capital consumption
06. Which use of risk-adjusted performance measures is most appropriate?
a) Ignoring tail risk because average returns are what matter
b) Replacing risk governance and controls because performance metrics are sufficient
c) Eliminating diversification effects by allocating the same capital to all units
d) Comparing business lines with different risk profiles on a consistent basis
07. Which ALM measure most directly focuses on the change in the economic value of equity under rate shocks?
a) Loan loss provision
b) Accounts receivable turnover
c) Economic Value of Equity (EVE) sensitivity
d) Sharpe ratio
08. Which scenario most clearly illustrates internal fraud as an operational loss category?
a) A trader hides unauthorized positions and falsifies records to avoid detection
b) A currency forward moves against the hedger due to FX volatility
c) Bond prices fall after a rate hike
d) A borrower misses a loan payment due to job loss
09. Which statement best describes the primary economic role of financial markets?
a) To eliminate uncertainty by guaranteeing stable asset prices
b) To facilitate capital allocation and risk transfer between participants
c) To replace all financial intermediaries with government agencies
d) To ensure all investors earn the same return
10. A bank begins preparing for climate risk disclosure mandates. Which disclosure theme is most consistent with common climate disclosure frameworks?
a) Only daily trading profits from carbon credit desks
b) Only details of employee travel emissions, with no financial risk context
c) Governance and oversight of climate-related risks, plus risk management and relevant metrics
d) Only a statement that “the bank supports sustainability” with no risk details
Answers:
Question: 01
Answer: c |
Question: 02
Answer: a |
Question: 03
Answer: b |
Question: 04
Answer: d |
Question: 05
Answer: a |
Question: 06
Answer: d |
Question: 07
Answer: c |
Question: 08
Answer: a |
Question: 09
Answer: b |
Question: 10
Answer: c |
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