Associate PRM case studies
Associate PRM · Put your knowledge to work in context.
The Associate Professional Risk Manager (Associate PRM) is an entry-level risk management credential offered by the Professional Risk Managers' International Association (PRMIA). It is aimed at students, recent graduates, and early-career professionals who want a structured foundation in risk management before pursuing advanced designations such as the PRM™. The Associate PRM case studies are 5 cases and about 4,199 words.
1The Model That Passed Validation and Nobody Owned
A mid-sized regional bank has just received its regulator's annual review letter. The internal audit report notes that the bank's credit-scoring model, used to approve small-business loans up to $250,000, was redeveloped eighteen months ago by an external vendor.
826 words, about 4 min2The Correlation Assumption in a Concentrated Portfolio
A specialty lender holds a $1.2 billion portfolio of loans to independent hotels in three coastal resort markets. Historically, defaults in the portfolio were treated as largely independent because the borrowers are unrelated family businesses with no common ownership.
827 words, about 4 min3The Covenant That Was Never Tested
A commercial bank has a $40 million term loan outstanding to a logistics company. The loan carries a leverage covenant tested quarterly: net debt to EBITDA must stay below 4.0x.
857 words, about 4 min4The Hedge That Stopped Working When Rates Moved
A savings institution holds a 600 million portfolio of fixed-rate residential mortgages funded largely by short-term deposits. To manage interest rate risk, the treasury desk entered a pay-fixed interest rate swap with a notional of 400 million, matched to the portfolio's expected duration.
793 words, about 4 min5The Star Trader and the Missing Limit
A proprietary trading desk at a mid-sized securities firm has produced 40% of the firm's revenue for three consecutive years. The desk's head trader has been with the firm for eleven years, reports directly to the CEO rather than to the head of trading, and has authority to approve his own trades up to 50 million notional.
896 words, about 4 min