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Updated: May 26, 2026
Q & A: 112 Questions and Answers
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1. The financial intermediary services provided by Fannie Mae and Freddie Mac were designed to
A) Buy mortgage-backed loans for banks and keep them all on their books, using them as collateral for the US government to borrow
B) Compete directly with banks in selling mortgaged to would-be home owners
C) Offer loans directly to the consumer
D) Repackage mortgage loans made by banks and sell them on to investors as asset backed securities
2. Metallgesellschaft's retail contracts were
A) hedged using exchange-traded futures with longer maturities than the retail contracts
B) hedged using exchange-traded futures with shorter maturities than the retail contracts
C) unhedged
D) fully hedged using exchange-traded futures of the same maturities as the retail contracts
3. Which of the following is FALSE?
A) SIMEX made inquiries to Barings Bank about large margin calls on its positions
B) Nick Leeson claimed to be running an arbitrage book
C) Nick Leeson also ran the back office for his trading area
D) Nick Leeson dealt in complex derivatives lacking transparency of pricing
4. As a PRMIA member, you have certain responsibilities. Among these are the requirement(s) to:
A) Vote in Board elections
B) Attend at least one PRMIA chapter meeting per year
C) All of the above
D) Adhere to the PRMIA Standards of Best Practice, Conduct and Ethics
5. When considering the performance of Northern Rock within its peer group of banks, which of the following is not correct?
A) Only a few months previously it had reported record profits.
B) The quality of its' assets was never in question.
C) Its' loan loss record was poor by industry standards.
D) For many years it was regarded as a star-performer in the financial markets.
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: B | Question # 3 Answer: D | Question # 4 Answer: D | Question # 5 Answer: C |
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