Weekend Sale Limited Time 70% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: merry71

Free Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition Practice Questions

Exams4sure Dumps

Exam style questions across every 8007 domain

Last Update 2 days ago
Total Questions : 132

Start with our free 8007 practice questions, carefully crafted to mirror the domains, phrasing, and difficulty of the real PRM Certification exam. Each 8007 exam question comes with a detailed rationale that explains not just which answer is correct but why the others fall short. That's how concepts stick. Use the free set to benchmark yourself: identify your PRMIA weak domains, see where you're losing marks, and build a focused study plan in minutes.

8007 PDF

8007 PDF (Printable)
$46.5
$154.99

8007 Testing Engine

8007 PDF (Printable)
$51
$169.99

8007 PDF + Testing Engine

8007 PDF (Printable)
$63.9
$212.99
Question # 1

A quadratic form is

Options:

A.  

defined as a positive definite Hessian matrix.

B.  

an algebraic expression in two variables, x and y, involving , and terms.

C.  

a specific solution of the Black-Scholes pricing formula

D.  

an algebraic expression in two variables, x and y, involving , , and terms.

Discussion 0
Question # 2

For the function f(x) =3x-x3 which of the following is true?

Options:

A.  

x = 0 is a minimum

B.  

x = -3 is a maximum

C.  

x = 2 is a maximum

D.  

None of these

Discussion 0
Question # 3

Every covariance matrix must be positive semi-definite. If it were not then:

Options:

A.  

Some portfolios could have a negative variance

B.  

It could not be used to simulate correlated asset paths

C.  

The associated correlation matrix would not be positive semi-definite

D.  

All the above statements are true

Discussion 0
Question # 4

Consider two functions f(x) and g(x) with indefinite integrals F(x) and G(x), respectively. The indefinite integral of the product f(x)g(x) is given by

Options:

A.  

F(x)G(x)

B.  

F(x)g(x) + f(x)G(x)

C.  

F(x)g(x) - ∫F(x)g'(x)dx

D.  

f(x)G(x) - ∫F(x)g'(x)dx

Discussion 0
Question # 5

Which of the following statements concerning class intervals used for grouping of data is correct?

When grouping data, attention must be paid to the following with regards to class intervals:

1. Class intervals should not overlap

2. Class intervals should be of equal size unless there is a specific need to highlight data within a specific subgroup

3. The class intervals should be large enough so that they not obscure interesting variation within the group

Options:

A.  

Statements 2 and 3 are correct

B.  

Statements 1 and 2 are correct

C.  

All three statements are correct

D.  

Statements 1 and 3 are correct

Discussion 0
Question # 6

Let X be a random variable distributed normally with mean 0 and standard deviation 1. What is the expected value of exp(X)?

Options:

A.  

E(exp(X)) = 1.6487

B.  

E(exp(X)) = 1

C.  

E(exp(X)) = 2.7183

D.  

E(exp(X)) = 0.6065

Discussion 0
Question # 7

In a binomial tree lattice, at each step the underlying price can move up by a factor of u = 1.1 or down by a factor of . The continuously compounded risk free interest rate over each time step is 1% and there are no dividends paid on the underlying. The risk neutral probability for an up move is:

Options:

A.  

0.5290

B.  

0.5292

C.  

0.5286

D.  

0.5288

Discussion 0
Question # 8

Your stockbroker randomly recommends stocks to his clients from a tip sheet he is given each day. Today, his tip sheet has 3 common stocks and 5 preferred stocks from Asian companies and 3 common stocks and 5 preferred stocks from European companies. What is the probability that he will recommend a common stock AND/OR a European stock to you when you call and ask for one stock to buy today?

Options:

A.  

11/16

B.  

7/8

C.  

9/16

D.  

None of these

Discussion 0
Question # 9

A bond has modified duration 6 and convexity 30. Find the duration-convexity approximation to the percentage change in bond price when its yield increases by 5 basis points

Options:

A.  

10 basis point rise

B.  

24 basis fall

C.  

24 basis point rise

D.  

30 basis points fall.

Discussion 0
Question # 10

An asset price S is lognormally distributed if:

Options:

A.  

the change in price (dS) is normally distributed

B.  

1/S is normally distributed

C.  

ln(dS/S) is normally distributed

D.  

ln(1+dS/S) is normally distributed

Discussion 0

Free Exams Sample Questions