Prepare for the PRMIA Mathematical Foundations of Risk Measurement :II exam with our extensive collection of questions and answers. These practice Q&A are updated according to the latest syllabus, providing you with the tools needed to review and test your knowledge.
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Consider two securities X and Y with the following 5 annual returns:
X: +10%, +3%, -2%, +3%, +5%
Y: +7%, -2%, +3%, -5%, +10%
In this case the sample covariance between the two time series can be calculated as:
A biased coin has a probability of getting heads equal to 0.3. If the coin is tossed 4 times, what is the probability of getting heads at least two times?
Find the roots, if they exist in the real numbers, of the quadratic equation
Suppose I trade an option and I wish to hedge that option for delta and vega. Another option is available to trade. To complete the hedge I would
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