Associate PRM study guide
Associate PRM · Work through your exam, one topic at a time.
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 study guide has 7 sections and about 1,827 words.
01Risk Management Fundamentals and Governance
Risk is the effect of uncertainty on objectives, usually expressed as a combination of likelihood and impact. Candidates must distinguish risk appetite (the amount of risk an organization is willing to accept in pursuit of its objectives) from risk tolerance (the acceptable variation around that appetite) and risk capacity (the maximum risk the organization can bear before breaching constraints such as capital or liquidity).
301 words, about 2 min02Risk Identification, Measurement and Assessment
Risk identification aims to find all material risks before they crystallize. Candidates should know techniques such as brainstorming, Delphi, scenario analysis, SWOT, process mapping, and loss-event databases.
268 words, about 1 min03Credit Risk
Credit risk is the risk of loss from a counterparty failing to meet its obligations. Candidates must understand the 5 Cs of credit : Character, Capacity, Capital, Collateral, and Conditions.
258 words, about 1 min04Market Risk
Market risk is the risk of loss from movements in market prices: interest rates, equity prices, FX rates, and commodity prices. Candidates must know value at risk (VaR) and its limitations: it is a quantile measure, says nothing about tail losses beyond the confidence level, and can be gamed.
278 words, about 1 min05Operational and Enterprise Risk
Operational risk is the risk of loss from inadequate or failed internal processes, people, systems, or external events. It includes fraud , cyber risk , business continuity , legal risk , and model risk .
259 words, about 1 min06Risk Control, Mitigation and Reporting
Risk control involves actions to reduce likelihood or impact. Mitigation includes avoidance, reduction, transfer (insurance, hedging), and acceptance.
241 words, about 1 min07Risk Management Professional Conduct and Ethics
Risk professionals must adhere to ethical standards: integrity, objectivity, confidentiality, competence, and professionalism. Conflicts of interest must be disclosed and managed.
222 words, about 1 min