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Exam 8011 Lab Questions & 8011 Certification Practice

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PRMIA's CCRM certification is highly regarded in the financial industry and is recognized by a number of leading financial institutions around the world. Credit and Counterparty Manager (CCRM) Certificate Exam certification provides professionals with a competitive edge in the job market and demonstrates their commitment to excellence in credit and counterparty risk management.

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Pass Guaranteed Quiz 2025 PRMIA High-quality 8011: Exam Credit and Counterparty Manager (CCRM) Certificate Exam Lab Questions

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PRMIA Credit and Counterparty Manager (CCRM) Certificate Exam Sample Questions (Q177-Q182):

NEW QUESTION # 177
A corporate bond has a cumulative probability of default equal to 20% in the first year, and 45% in the second year. What is the monthly marginal probability of default for the bond in the second year, conditional on there being no default in the first year?

• A. 3.07%
• B. 15.00%
• C. 31.25%
• D. 2.60%

Answer: A

Explanation:
Note that marginal probabilities of default are the probabilities for default for a given period, conditional on survival till the end of the previous period. Cumulative probabilities of default are probabilities of default by a point in time, regardless of when the default occurs. If the marginal probabilities of default for periods 1, 2... n are p1, p2...pn, then cumulative probability of default can be calculated as Cn = 1 - (1 - p1)(1-p2)...(1-pn).
For this question, we can calculate the marginal probability of default for year 2 by solving the equation [1 - (1 - 20%)(1 - P2) = 45%] for P2. Solving, we get the marginal probability of default during year 2 as 31.25%.
Since this is the annual marginal probability of default, we will need to convert it to a monthly number, which we can do by solving the following equation where M1 is the monthly marginal probability of default.
1 - 31.25% = (1 - M1)