Killexams 8010 Question Bank with Free sample questions. 8010 dumps questions comprises of Complete Pool of Questions and Answers with Question Bank confirmed and tried alongside references and clarifications (where relevant). We want to make you alright with your Operational Risk Manager (ORM) information that you see all tips and deceives with our 8010 Practice Questions.

8010 Operational Risk Manager (ORM) test format |
Sun, 27 Dec 2015 21:39:00 -0600text/html Certified Paralegal test Preparation

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Tue, 29 Aug 2023 11:39:00 -0500 en text/html
Sample test questions - energy - OCR Gateway

At the end of your GCSE Physics course, you will sit two test papers. You will be entered for both papers at the same tier (either Foundation tier or Higher tier). Each paper:

This paper will cover the following topics:

Each paper is split into two parts, Section A and Section B.

This section is worth 15 marks, and only has multiple choice questions, each worth 1 mark.

You should spend no more than 30 minutes on this section.

This section is worth 75 marks, and has short answer questions. Each question is worth 1 to 5 marks, and include:

This section also has a six-mark extended Level of Response question.

This paper will cover the following topics:

Your knowledge of the syllabus covered in Paper 1 is also assumed for this paper, so these syllabus may also be assessed.

This section is worth 15 marks, and only has multiple choice questions, each worth 1 mark.

You should spend no more than 30 minutes on this section.

This section is worth 75 marks, and has short answer questions. Each question is worth 1 to 5 marks, and include:

This section also has a six-mark extended Level of Response question.

Thu, 01 Jun 2023 21:38:00 -0500 en-GB text/html
Nursing test Pass Rates Appear to Be Rising. Why?

In January 2023, we reported on the reasons why nursing test pass rates fell in 2020 and 2021. In this report, we follow up on what has happened since.

During the first 2 years of the COVID-19 pandemic, the share of candidates who passed the national licensure test to work as a registered nurse fell sharply, from 88.2% to 82.5%, for first-time U.S.-educated candidates, with a smaller decline -- from 72.8% to 68.9% -- for all candidates, including internationally educated and repeat test-takers.

In 2022, pass rates continued to drop, averaging 79.9% (8 percentage points lower than in 2019) for first-time U.S.-educated candidates, and 63.4% for all candidates, the lowest point in the last decade.

In 2023, to most experts' surprise, that spiral appears to be turning around.

Things Are Looking Up

The reason for this reversal depends on whom you ask. Test developers have argued that rates improved due to radical transparency and massive outreach to stakeholders, while some online critics have suggested the test simply got easier. Other nurse educators agreed that the increased transparency and outreach impacted rates, but worry those same measures exacerbated a culture of "teaching to the test."

Understanding trends in test pass rates also requires context.

Year-to-Date NCLEX Pass rates for 2023

The National Council of State Boards of Nursing (NCSBN) produces the test that aspiring nurses take to gain licensure: the National Council Licensure Examination (NCLEX). This test uses computerized adaptive testing, which means each test-taker gets virtually a different exam, the difficulty of which changes based on the response given.

Every 3 years, the NCSBN assesses the pass rates for the test and determines whether the current passing standard is appropriate. If the NCSBN's board of directors decides that the level of clinical judgment required of nurses in practice has increased, it can vote to raise the passing standard.

In December 2022, the NCSBN's board voted to keep the current passing standard on the NCLEX through March 31, 2026. Months later, on April 1, the NCSBN launched the Next Generation NCLEX (NGN), a new version of the NCLEX that aims to more effectively measure test-takers' clinical judgment.

Anytime a new test is introduced, pass rates tend to dip by a few percentage points in the first two to three quarters, explained Philip Dickison, PhD, RN, CEO of the NCSBN. He said he was naturally a bit concerned about a new test compounding the "drastic drop in the ability curve" seen during the pandemic, "but it was still the right thing to do."

Keith Rischer, PhD, RN, a nurse educator and owner of KeithRN, a nursing education company, recalled that the last major change to the NCLEX occurred when the passing standard was raised by 0.16 percentage points in 2012. Pass rates fell more than 7 percentage points -- from 90.34% for first-time candidates to 83.04% -- in a single year.

While the NCSBN kept the same passing standard in 2022, the stronger emphasis on clinical judgment and the "unique six-question case studies" in the NGN was predicted to increase the difficulty of the test in some respects.

"There was an anticipation that this was going to be another precipitous decline in NCLEX pass rates," Rischer said.

Post-Pandemic Rebound

However, that wasn't what happened. Instead, preliminary data showed a jump in pass rates, from 79.9% in 2022 to 88.6% in 2023, for all first-time U.S.-educated candidates. Importantly, the 2023 data exclude the fourth quarter of the calendar year, which typically has the lowest pass rate, experts noted.

Still, Dickison said he was "pretty amazed" at the speed of the recovery. Some viewed the change as a "huge increase," but he stressed that rates were starting from a low baseline following a 3-year period when other variables, namely pandemic-related disruptions, impacted pass rates.

"What I think you're seeing ... is that we have rebounded to pre-pandemic ability levels in our measurements," he said.

Dickison credits the rebound to NCSBN's decision to let educators, regulators, and -- controversially -- preparatory groups "under the hood" of the new test for several years before the NGN actually launched.

"The idea was to be as transparent as possible to all stakeholders," Dickison said. This meant leveraging opportunities at conferences and during webinars, and sharing what to expect of the new test -- from case studies and measurement models -- in newsletters. Dickison also credited educators for the big role they played in helping prepare students.

Rayna Letourneau, PhD, RN, executive director of the Florida Center for Nursing, said that while some nurse educators have noted the test has gotten "too easy," she suggested that perhaps the NGN is simply "a more logical way to measure what nursing students are being taught."

Similarly, she attributes the rise in pass rates to the focus on increased resources and preparation of candidates, including the implementation of "student success" coaching programs.

Teaching to the Test?

Rischer seemed to have a different view, pointing out that the NGN offers partial credit for certain "select-all-that-apply" multiple-choice questions. He said that he believes the real reason for improved pass rates is a shift in nursing education, though he added that his hypothesis is, at this point, "conjecture."

"What we have in the nursing literature for over almost 50 years ... is this widening gap between how nursing is taught in the university and college settings and how it's actually practiced at the bedside," he said. "We're not preparing our graduates for real-world practice realities."

Rischer said he grew even more concerned when he learned from online discussions that some professors were using NGN sample items to teach first-semester students.

"That's called teaching to the test," he argued. Instead of teaching students "alternative multiple-choice items, we need to be teaching our students the open-ended thinking of clinical practice."

For example, for a patient who had an appendectomy, Rischer said the appropriate steps are to take vital signs and conduct a head-to-toe assessment.

"There is not a 'select-all-that apply' multiple-choice item on your forehead that I could say, 'You know what? This is the correct answer,'" he added, noting that the NCSBN "is part of the problem." Currently, the primary mechanism that state nursing boards use to measure a program's performance is their first-time pass rate on the NCLEX, which only "reinforc[es] this unhealthy culture of teaching to the test."

The end result of that, as studies have shown, is that "currently less than 10% [of new nurses] have what practice partners would say is entry-level clinical judgment competency," Rischer said, citing a 2021 study. "Complications develop when a nurse doesn't notice or recognize what's most important until it's too late. So ... clinical judgment competency is a big deal. And teaching to the test ... isn't going to solve that."

He said one solution is to move away from first-time test-taker metrics and potentially allow students to take the test twice and then average their score.

Another, more dramatic, change would be to include a skills test or what Rischer calls "demonstrable competencies" for essential skills involved in clinical decision making, which could be evaluated by an "objective observer."

"It will take more time. It will take more money, but this is something that we can and should be doing," he said.

'Not the Only Measurement'

For his part, Dickison noted that the NGN, like any exam, has limitations.

While it "measures your cognitive and your thinking ability, our test does not measure the affective domain, doesn't measure character," he said. For example, the test cannot assess a "less-than-acceptable social interaction" a student has with a professor, nor does the test know which student is always late to class.

"If they don't show up to class on time every day, that might be a [sign] that they're not going to show up to a patient when they need to," Dickison explained. "That's why you have a regulatory system. That's why we have an education [system] ... these all have to work together. If you don't pass the NCLEX, you don't go to work, but it is not the only measurement that tells us we have a good nurse."

  • Shannon Firth has been reporting on health policy as MedPage Today's Washington correspondent since 2014. She is also a member of the site's Enterprise & Investigative Reporting team. Follow

Sun, 31 Dec 2023 10:00:00 -0600 en text/html
Examination advice

A typical examination question in Mathematics will have several parts to it. Some parts (most usually at the beginning of the question) test your knowledge, by asking you to reproduce "bookwork", i.e. material presented in the lectures. Really, these parts test how well you've revised. Occasionally, especially in certain more advanced courses, there are entire questions that are bookwork. In some courses, some pieces of bookwork come up in the test almost every year. In other courses, hardly any bookwork is set explicitly.

Tip: Figure out which pieces of bookwork come up most frequently, and make sure you can answer those questions easily and quickly.

You would be surprised how many poor attempts at routine bookwork questions we see every year. These are the parts of the questions that we expect students to be able to do.

Other parts of examination questions involve a "problem". In a "Methods" course, this will typically involve you applying a known technique from the course, and again this is something we expect you to be able to do. In a Pure Mathematics course, you might be asked to prove a result, or to apply a result in a particular setting.

Tip: Sometimes (but certainly not always!), the first part of the question is intended as a big hint as to how you should approach the second part.

Many test questions, especially those that are otherwise very routine, have a last part (a "rider") which is more challenging than the rest of the question. This is quite deliberate, and the intention is to test whether you've really understood the material.

Tip: Do try all the riders (they're not always so hard after all!) but don't waste too much time on them in an test if there are other things you can tackle instead.

Students sometimes seem to be annoyed that they have to do something clever to get 100% on a question. Don't forget, in many other subjects it's practically impossible to score 100% on a question!

Tip: Make sure you've answered all the parts of the question. Sometimes you're asked to do seven or eight things, and it's easy to overlook one.

Fri, 28 Aug 2020 05:22:00 -0500 en-GB text/html
Exam skills - applied anatomy and physiology


  1. Identify the equation to work out cardiac output (Q).
    • A) stroke volume × heart rate
    • B) blood pressure × heart rate
    • C) tidal volume × stroke volume
    • D) blood pressure × stroke volume
  2. Calculate the exercising cardiac output for a 10 km runner whose heart rate increases to 180 bpm and stroke volume increases to 120 ml. (2)
  3. Identify the muscle that forms an antagonistic pair with the triceps. (1)
  4. Describe the action of the diaphragm when breathing in. (2)
  5. Using the evidence from the graph below discuss how the cardiovascular system adapts to long term aerobic exercise participation. (8)


  1. A
  2. Q = HR x SV or 180 x 120 which equals Q = 21600 ml or 21.6l
  3. Biceps
  4. The diaphragm contracts (1) and flattens (1)
  5. Answer to include:
    • decreased resting BP
    • cardiac hypertrophy – increased stroke volume (SV), increased cardiac output (Q), decreased resting heart rate (HR) , increased max Q, increased HR reserve means the athlete can train at the same intensity at lower HR
    • capillarisation around the alveoli and skeletal muscle means greater O2 diffusion
    • increased strength of respiratory muscles, increased vital capacity, decreased breathing frequency (f), decreased tidal volume means greater amount of O2 available to working muscle
    • increased red blood cell production, increased haemoglobin level, increased O2 carrying capacity, increased gaseous exchange, means greater O2 carrying capacity
Wed, 03 Jan 2024 01:01:00 -0600 en-GB text/html
Office of the Registrar

General Final test Information

GeneralFinal exams will be generated by the Registrar’s Office according to an test matrix on or about the last day of the add/drop period for the term for any course that has 'Yes' indicated for a Final test in the catalog. The day and time of the first class meeting during the week determine the date and time for each exam. Courses that meet outside the normal university block scheduling will be scheduled within the time block that best fits the schedule without creating conflicts for students.

Exam times are as follows:

  • 8 – 11 a.m.
  • 11:30 a.m. – 2:30 p.m.
  • 3 – 6 p.m.
  • 6:30 - 9:30 p.m.

While test blocks are three hours long, the genuine length of the test is determined by the instructor.

If examination days are postponed because of weather conditions, the first make-up day is documented on the academic calendar.

Faculty should review their test schedule just after the last day of add/drop. If an test was not generated or changes are needed, please email: Requests for final exams, combined exams, etc. will not be accepted after the mid-semester evaluation date for the term in question. Please refer to the academic calendar for specific date information.

Common Exams

  • Faculty should plan to administer a separate test for each section of a course that they are teaching.
  • Requests for common exams must be approved by the Dean AND the course must have, at minimum, three (3) class sections to be considered for common test scheduling. 
  • Requests should be submitted by email to: no later than the mid-semester evaluation date for said term, and all requests are subject to classroom availability.
  • Common Finals will need to be applied to all sections of a course not to individual instructors.
  • Common test Finals will be assigned to a common test block. 
    • Students who are scheduled for two common exams at the same time should check with their instructors to see which test has priority.

Note: Requests for combined exams will not be accepted after the mid-semester evaluation date for the term in question. Please refer to the academic calendar for specific date information.

Examination Conflicts

If a student has three (or more) finals scheduled on the same test day, the student has the right to ask that a make up test (or exams) be scheduled to reduce the number of exams in each day to two. Under these circumstances, required courses1 take priority, so the student should make every effort to arrange the make-up test for a non-required course with the respective instructor. Likewise, if a student has two finals scheduled in the same test period, the required course takes priority; the student should schedule a make-up test for the non-required conflicting course with the respective instructor. If for any reason a mutually agreeable solution between the student and the instructor cannot be achieved, the student should see his or her college dean immediately.

Students – If you have questions regarding any of your final exams, please contact your instructor directly. Instructors should reach out by email to: if an test update is needed in SiS.

1'Required courses' refers to whichever course is required toward that specific student’s degree pathway.

Final Exams for Hybrid and Virtual Class Sections

Exams (including final exams) for fully virtual classes should be administered virtually, as that is the modality which students selected. Exceptions to hold on-campus exams require deans' approval. An email (noting the approval) should be sent by email to: so that the test location may be updated – exceptions are subject to room availability. If approved, faculty must indicate the alternate test format in their course syllabus and accommodate students who are unable to attend in-person exams.

If a class section is hybrid (includes both an in-person meeting and either an online or virtual meeting pattern), then the final test will be assigned as in-person, but the instructor may request the final test to be virtual/online depending on the modes of instruction of the hybrid section. Hybrid courses also include courses that have more than one component with different modes of instruction (i.e., the lecture portion is virtual, but the recitation is in-person) and the instructor may decide whether or not the final test is in-person in this scenario as well. Any requests for final test updates should be sent by email to:

Undergraduate and Graduate Final Exams (Day-school Sections)

  • Faculty are not required to administer cumulative final examinations and should assess their students as appropriate to their discipline and course content. If an test is assigned and will not be taking place, please email:
  • Faculty who opts to administer final examinations must do so at the time and place specified by the Registrar's Office and listed in SiS. All day-school sections that are noted in the catalog with 'Yes' for final exam, will have a final test block generated.
  • Final take-home examinations or final papers must not be due earlier than the time that the Registrar's Office has scheduled the final examination for the course in question (although instructors may opt to allow such examinations or papers to be submitted early).
    • Note: If an academic program requires that students take final examinations for accreditation purposes, faculty are expected to adhere to the requirements of their accrediting organization.
  • Graduate class sections may opt to administer their final exams on the last day of regular class meetings (week prior to the final test period) but should contact scheduling if this is what they decide and need to remove a final test block that was generated for their class section.
  • For any course with a final test during the test period, no hour-examination (or major paper or project) shall be administered or due during the last five academic days of the semester unless the college dean has allowed an exemption.

Graduate, Online and Professional Studies Final Exams (GPS Sections)

Graduate, Online and Professional Studies sections (section number typically begins with '0') take place on the final on-campus meeting day for that section (usually the week prior to the final test period) – please see the on-campus course dates on Graduate, Online and Professional Studies website for the final meeting date (not to be confused with the course session dates).

If a GPS section is 'matched' (combined) with a day-school section (example ACCT 2010 201 and ACCT 2010 001), the final test will follow day-school guidelines and an test block will be assigned for both sections in SIS.

Classroom Reservations During the Final test Period

Classroom reservations for ad hoc needs during the final test period (review sessions, test accommodations, makeup exams, etc.) will be accepted one week prior to the final test period. Please email scheduling for these requests.

Makeup Examinations

Individual makeup exams should be coordinated between the student and instructor as needed and should take place through the UMass Lowell Testing Centers or in a department location (please do not use academic classrooms for individual makeup exams without a confirmed reservation).

If an entire class needs to makeup an test due to an unforeseen circumstance or emergency, the test should be rescheduled by emailing: Makeup exams for classes should take place during the regular examination period. 

The university final test makeup dates listed on the university calendar are only to be used for inclement weather or other unanticipated university closure and should not be used as final test dates for individual student or class makeup exams.

Disability Services Support & Resources

Students who are registered with the Disability Services Office and have been approved for an extended time accommodation: if you have two exams scheduled on the same day, you may reschedule one of the exams if it has been confirmed that both exams are scheduled to use the entire 3-hour block. Please refer to the instructions under Examination Conflicts listed above to do so. For any other accommodation or disability-related question or concern, please contact by email: or visit Disability Services website for faculty and student resources.

Thu, 26 Feb 2015 17:42:00 -0600 en text/html
Document Examination


To determine authenticity and authorship.


The specifics of an investigation will depend on the nature of the document being studied (e.g., historical or personal) and the goals of the inquiry. Generally speaking, a document will be examined from three different aspects: historical, scientific, and stylistic.


Tips on how to authenticate a document by comparing handwriting.

Historical Analysis

It is virtually impossible to pinpoint the age of an undated document, but there may be clues to the era. If it is a printed piece - say a greeting card - the method of printing, address, and even the stamp may be important.

At the very least, materials and techniques must be consistent with place and time. Many forgeries are identified by the presence of materials that didn’t exist at the time alleged.

Scientific Analysis

A detailed paper analysis will detect every shred of physical evidence concealed in a document.

Stylistic Analysis

Comparisons of style are essential for authentication. Penmanship, cultural phrasing, and form of address can help to identify both the era and author. Handwriting comparisons can authenticate a signature or manuscript.

In some cases, all of it taken together can’t solve a historical puzzle. For example, there are five known manuscript copies of the Gettysburg Address. Testing has proved that all are authentic Lincoln documents. But it will never prove, definitively, which of the five Lincoln actually read from at Gettysburg.

Mon, 20 Mar 2023 10:19:00 -0500 text/html

8010 test format - Operational Risk Manager (ORM) Updated: 2024

Get 8010 8010 test dumps with practice software.
Exam Code: 8010 Operational Risk Manager (ORM) test format January 2024 by team

8010 Operational Risk Manager (ORM)

Exam Specification: 8010 Operational Risk Manager (ORM)

Exam Name: 8010 Operational Risk Manager (ORM)
Exam Code: 8010
Exam Duration: 3 hours
Passing Score: Not specified
Exam Format: Multiple-choice
Exam Delivery: Proctored online or at a testing center

Course Outline:

1. Introduction to Operational Risk Management
- Overview of operational risk and its importance
- Key concepts and terminology in operational risk management
- Roles and responsibilities of operational risk managers

2. Risk Assessment and Measurement
- Identification and categorization of operational risks
- Risk assessment techniques (qualitative and quantitative)
- Key risk indicators (KRIs) and risk measurement methodologies

3. Risk Control and Mitigation
- Designing and implementing risk control measures
- Risk mitigation strategies and best practices
- Controls monitoring and testing

4. Operational Risk Monitoring and Reporting
- Establishing an effective risk monitoring framework
- Key metrics and reporting requirements
- Role of technology in operational risk monitoring and reporting

5. Operational Risk Governance and Culture
- Roles and responsibilities of senior management and the board
- Establishing an effective operational risk governance framework
- Building a strong risk culture within the organization

6. Regulatory Environment and Compliance
- Overview of relevant regulatory requirements and guidelines
- Compliance management and reporting
- Role of operational risk management in regulatory compliance

7. Incident Management and Business Continuity
- Incident identification, reporting, and escalation processes
- Incident response and recovery planning
- Business continuity management and disaster recovery

Exam Objectives:

1. Understand the fundamentals and key concepts of operational risk management.
2. Assess and measure operational risks using appropriate techniques and methodologies.
3. Implement risk control measures and develop risk mitigation strategies.
4. Monitor and report on operational risks using relevant metrics and reporting frameworks.
5. Establish effective operational risk governance and foster a strong risk culture.
6. Comply with regulatory requirements and manage operational risk in compliance.
7. Manage incidents effectively and ensure business continuity and disaster recovery.

Exam Syllabus:

Section 1: Introduction to Operational Risk Management (15%)
- Definition and importance of operational risk management
- Operational risk terminology and concepts
- Role of operational risk managers

Section 2: Risk Assessment and Measurement (20%)
- Identification and categorization of operational risks
- Qualitative and quantitative risk assessment techniques
- Key risk indicators (KRIs) and risk measurement methodologies

Section 3: Risk Control and Mitigation (20%)
- Designing and implementing risk control measures
- Risk mitigation strategies and best practices
- Controls monitoring and testing

Section 4: Operational Risk Monitoring and Reporting (15%)
- Establishing an effective risk monitoring framework
- Key metrics and reporting requirements
- Role of technology in operational risk monitoring and reporting

Section 5: Operational Risk Governance and Culture (10%)
- Roles and responsibilities of senior management and the board
- Operational risk governance framework
- Building a strong risk culture within the organization

Section 6: Regulatory Environment and Compliance (10%)
- Overview of regulatory requirements and guidelines
- Compliance management and reporting
- Role of operational risk management in regulatory compliance

Section 7: Incident Management and Business Continuity (10%)
- Incident identification, reporting, and escalation processes
- Incident response and recovery planning
- Business continuity management and disaster recovery
Operational Risk Manager (ORM)
PRMIA Operational test format

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Operational Risk Manager (ORM)
Question: 88
What would be the correct order of steps to addressing data quality problems in an organization?
A. Assess the current state, design the future state, determine gaps and the actions required to be implemented to
eliminate the gaps
B. Articulate goals, do a strategy-fit analysis and plan for action
C. Design the future state, perform a gap analysis, analyze the current state and implement the future state
D. Call in external consultants
Answer: A
The correct answer is choice a
The correct order of steps to addressing data quality problems in an organization would include:
Question: 89
Which of the following is not a permitted approach under Basel II for calculating operational riskcapital
A. the internal measurement approach
B. the basic indicator approach
C. the standardized approach
D. the advanced measurement approach
Answer: A
The Basel II framework allows the use of the basic indicator approach, the standardized approach and the advanced
measurement approaches for operational risk. There is no approach called the internal measurement approach
permitted for operational risk. Choice a is therefore the correct answer.
Question: 90
A bank expects the error rate in transaction data entry for a particular business process to be 0.005% .
What is the range of expected errors in a day within +/- 2 standard deviations if there are 2,000,000 such transactions
each day?
A. 80 to 120 errors in a day
B. 60 to 80 errors in a day
C. 0 to 200 errors in a day
D. 90 to 110 errors in a day
Answer: A
Error rates are generally modeled using thePoisson distribution. Recall that the Poisson distribution has only one
parameter which is its mean and also its variance. In the given case, the mean number of errors is 2,000,000 x
0.005% = 100. Since this is the variance as well, the standard deviation is 100 = 10. Therefore the range of outcomes
within 2 standard deviations of the mean is 100 +/- (2*10) = 80 to 120 errors in a day.
Question: 91
Which of the following is the best description of the spread premium puzzle:
A. The spread premium puzzle refers to observed default rates being much less than implied default rates, leading to
lower credit bonds being relatively cheap when compared to their genuine default probabilities
B. The spread premium puzzle refers to dollar denominated non-US sovereign bonds being priced a at significant
discount to other similar USD denominated assets
C. The spread premium puzzle refers to AAA corporate bonds being priced at almost the same prices as equivalent
treasury bonds without offering the same liquidity or guarantee as treasury bonds
D. The spread premium puzzle refers to the moral hazard implicit in the monoline insurance market
Answer: A
Choice a is the correct answer. The other choices represent non-sensical statements.
Question: 92
Loss provisioning is intended to cover:
A. Unexpected losses
B. Losses in excessof unexpected losses
C. Both expected and unexpected losses
D. Expected losses
Answer: D
Loss provisioning is intended to cover expected losses. Economic capital is expected to cover unexpected losses. No
capital or provisions are set aside for losses in excess of unexpected losses, which will ultimately be borne by equity.
Choice d is the correct answer.
Question: 93
Which of the following credit risk models relies upon theanalysis of credit rating migrations to assess credit risk?
A. KMVs EDF based approach
B. The CreditMetrics approach
C. The actuarial approach
D. The contingent claims approach
Answer: B
The correct answer is Choice b. The following is a brief description of the major approaches available to model
credit risk, and the analysis that underlies them:
Question: 94
Under the standardized approach to calculating operational risk capital under Basel II, negative regulatory capital
charges for any of the business units:
A. Should be ignored completely
B. Should be offset against positive capital charges from other business units
C. Should be included after ignoring the negative sign
D. Should be excluded from capital calculations
Answer: B
According to Basel II, in any given year, negative capital charges (resulting from negative gross income) in any
business line may offset positive capital charges in other business lines without limit. Therefore Choice b is the
correct answer.
Question: 95
The probability of default of a security over a 1 year period is 3% .
What is the probability that it would not have defaulted at theend of four years from now?
A. 11.47%
B. 88.53%
C. 12.00%
D. 88.00%
Answer: B
The probability that the security would not default in the next 4 years is equal to the probability of survival raised to
the power four. In other words, =(1 -3%)^4 = 88.53%.
Choice b is the correct answer.
Question: 96
There are two bonds in a portfolio, each with a market value of $50m. The probability of default of the two bonds are
0.03 and 0.08 respectively, over a one year horizon.
If the probability of the two bonds defaulting simultaneously is 1.4%, what is the default correlation between the two?
A. 0%
B. 100%
C. 40%
D. 25%
Answer: D
Probability of the joint default of both A and B =
We know all the numbers except default correlation, and we can solve for it. DefaultCorrelation*SQRT(0.03*(1
0.03)*0.08*(1 0.08)) + 0.03*0.08 = 0.014. Solving, we get default correlation = 25%
Question: 97
A bullet bond and an amortizing loan are issued at the same time with the same maturity and with the same principal .
Which of these would have a greater credit exposure halfway through their life?
A. Indeterminate with the given information
B. They would have identical exposure half way through their lives
C. The amortizing loan
D. The bullet bond
Answer: D
A bullet bond is a bond that pays coupons covering interest during the life of the bond and the principal at maturity.
An amortizing loan pays the interest as well as a part of the principal with every payment. Therefore, the exposure of
the amortizing loan continually reduces, and approaches zero towards the end of its life. The bullet bond will always
have a higher exposure at any time during its life when compared to an equivalent amortizing loan. Hence Choice d
is the correct answer.
Question: 98
Which of the following belong to the family of generalized extreme value distributions:
I. Frechet
II. Gumbel
III. Weibull
IV. Exponential
B. I, II and III
C. II and III
D. All of the above
Answer: B
Extreme value theory focuses on the extreme and rare events, and in the case of VaR calculations, it is focused on the
right tail of the lossdistribution.
In very simple and non-technical terms, EVT says the following:
Question: 99
In estimating credit exposure for a line of credit, it is usual to consider:
A. a fixed fraction of the line of credit to be the exposure at default even though the currently drawn amount is quite
different from such a fraction.
B. the full value of the credit line to be the exposure at default as the borrower has an informational advantage that will
lead them to borrow fully against the credit line at the time of default.
C. only the value of credit exposure currently existing against the credit line as the exposure at default.
D. the present value of the line of credit at the agreed rate of lending.
Answer: A
Choicea is the correct answer. Exposures such as those to a line of credit of which only a part (or none) may be
drawn at the time of assessment present a difficulty when attempting to quantify credit risk. It is not correct to take the
entire amount of the line as the exposure at default, and likewise the current exposure is likely to be too aggressively
low a number to consider.
While the borrower has an information advantage in that he would be aware of the deterioration in credit standing
before the bank and would probably draw cash prior to default, it is unlikely that the entire amount of the line of credit
would be drawn in all cases. In some cases, none may be drawn. In other cases, the bank would become aware of the
situation and curtail or cancel access to the credit line in a timely fashion.
Therefore a fixed proportion of existing credit lines is considered a reasonable approximation of the exposure at
default against credit lines.
Question: 100
Which of the following should be included when calculating the Gross Income indicator used to calculate operational
risk capital under the basic indicator and standardized approaches under Basel II?
A. Insurance income
B. Operating expenses
C. Fees paid to outsourcing service proviers
D. Net non-interest income
Answer: D
Gross income is defined by Basel II (see para 650 of the Basel standard) as net interest income plus netnon-interest
income. It is intended that this measure should: (i) be gross of any provisions (e.g. for unpaid interest); (ii) be gross of
operating expenses, including fees paid to outsourcing service providers; (iii) exclude realised profits/losses from the
sale of securities in the banking book; and (iv) exclude extraordinary or irregular items as well as income derived from
What this means is that gross income is calculated without deducting any provisions or operating expenses from net
interest plus non-interest income; and does not include any realised profits or losses from the sale of securities in the
banking book, and also does not include any extraordinary or irregular item or insurance income.
Therefore operating expenses are to be notto be deducted for the purposes of calculating gross income, and neither are
any provisions. Profits and losses from the sale of banking book securities are not considered part of gross income, and
so isnt any income from insurance or extraordinary items.
Of the listed choices, only net non-interest income needs to be included for gross income calculations, and the others
are to be excluded. Therefore Choice d is the correct answer. Try to remember the components of gross income from
the definition above because in the test the question may be phrased differently.
Question: 101
According to the Basel II framework, subordinated term debt that was originally issued 4 years ago with amaturity of 6
years is considered a part of:
A. Tier 2 capital
B. Tier 1 capital
C. Tier 3 capital
D. None of the above
Answer: A
According to the Basel II framework, Tier 1 capital, also called core capital or basic equity, includes equity capital and
disclosed reserves.
Tier 2 capital, also called supplementary capital, includes undisclosed reserves, revaluation reserves, general
provisions/general loan-loss reserves, hybrid debt capital instruments and subordinated term debt issued originally for
5 years or longer.
Tier 3 capital, or short term subordinated debt, is intended only to cover market risk but only at the discretion of their
national authority. This only includes short term subordinated debt originally issued for 2 or more years.
An interesting thing to note is the difference between subordinated term debt under Tier 2 and the short term
subordinated debt under Tier 3. The distinction is based upon the years to maturity at the time the debt was issued.
The remaining time to maturity is not relevant.
For the subordinated term debt included under Tier 2, the amount that can be counted towards capital is reduced by
20% for every year when the debt is due within 5 years. This takes care of the time to maturity problem for Tier
2subordinated debt. For Tier 3 short term subordinated debt, this is not an issue because debt will only qualify for Tier
3 if it has a lock-in clause stipulating that the debt is not required to be repaid if the effect of such repayment is to take
the bank below minimum capital requirements.
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Final test solution

The Final test will be Monday, December 12 from 3:30-5:30 pm.

Prof. Hess will be available for last-minute questions on Monday in ME 3003B.

  • 9:30-10:30 am
  • 11:30 am - 1 pm
  • 1:30-3 pm

All students will take the test in CL50.

Some additional notes regarding the Final Exam:

  • The test will cover material from Lecture 30 (Gear Geometry) to Lecture 43 (GD&T) on the course schedule.
  • The test format will be similar to Exams 1 and 2 and to the exams posted on the course website: 25% short-answer questions and 75% work-out problems.
  • The test is closed-book and closed-note
    • Final test equation sheet (will be provided with the exam)
    • You may also bring an 8.5" x 11" crib sheet to the exam.  The crib sheet must be turned in with the exam.
  • The test will follow ME's calculator policy.

Final test from previous semesters

Fri, 01 Jul 2022 22:25:00 -0500 en-US text/html
Sample Entrance Exam
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When you are ready, proceed to the current exam.

Read about the new Word Police training manual, Word Court, by Word Police Commissioner Barbara Wallraff.

Join a conversation on Word Police and Word Court in Atlantic Unbound's reader forum, Post & Riposte.

Read accurate Word Court columns from The Atlantic Monthly, and browse the Word Fugitives archive, in The Court Record.

Sample Entrance Exam

Word Police exams consist of questions similar to the ones below. Here beneath each question we've told you which answer is correct, and explained why.

When you are taking an genuine exam, once you've answered all five questions, press the "Submit answers" button to have your responses scored. If you're not sure of the answer to any question, why not take your best guess? (No points are deducted for wrong answers.) You'll need to get at least four answers right to be allowed to proceed. On the next page, you will be asked a final question that you must answer correctly in order to pass the exam.

The genuine exams provide a clue about the intent of the questions that isn't available here -- namely, that each of them is the test for a particular squad or division. The questions on the entrance test for any given squad will have to do with that squad's specialty. So, for example, on the entrance test for the Number Unit, the focus of the questions will tend to be grammatical number (say, "the Word Police is ..." or "the Word Police are ..."?).

1. When Word Police officers perform their duties properly, fewer/less crimes against the language occur.


Fewer is for things that can be counted ("one crime, two crimes ..."; "The fewer crimes the better"). Less is for things that pile up as amounts, not numbers of items, and aren't countable ("There hasn't been much criminal activity lately"; "There's been less criminal activity than usual"). Because crimes falls into the former class of things, fewer is the only correct choice here. (See pages 191-192 in Word Court.)

2. While on duty, you see your neighbor Mr. Smith discarding a candy wrapper on the sidewalk. You pick it up, say in your most cheerful tone, "You dropped something. Here you are!" and hand it back to him. Afterward, should you keep the matter between you and him, between he and the Word Police Force, or between you and he?

Between you and him
Between he and the Word Police Force
Between you and he

Any pronoun that comes after between ought to be one that can be used as a grammatical object (as in "The Word Police want us"), not one that is used as a subject (for example, "We want to join the Word Police"). He is a subjective pronoun, so neither the second nor the third answer can be correct. You can be either kind of pronoun, and him is objective, so "between you and him" is the right answer. (See pages 130-134 in Word Court.)

3. Which is correct?

"It's a dull officer who spends all their time shining their badge."
"It's a dull officer who spends all her time shining her badge."
"It's a dull officer that spends all its time shining its badge."

An officer can't be plural. Nor is an officer neuter (its). An officer certainly can be female, though, so "... spends all her time ..." is fine. The second answer is the correct one. (See pages 28-32 in Word Court.)

4. With which statement do you agree?

"A Word Police officer must see that poetic justice is done everyday."
"A Word Police officer can't concern himself with poetic justice on an every day basis."
"A Word Police officer must at least try to see that poetic justice is done every day."

Once again, the real issue here is which of these statements is worded correctly. See those variations of everyday? Everyday, one word, is an adjective, and so when that's the form used, it's supposed to be modifying a noun. Every day is an adverb or a noun phrase. In the first answer, the adjective everyday is being used as if it were an adverb, modifying a verb; and in the second one, the adverb every day is being used as if it were an adjective, modifying a noun. Only in the third answer does the adverbial form match an adverbial function; this answer is correct. (See pages 190-191 in Word Court.)

5. Is this alright?


Alright is a very informal spelling. Standard English calls for all right. So no, it's not all right, thank you very much. No, indeed. (See page 153 in Word Court.)

Proceed to the entrance exam
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