Most Recent PRMIA 8007 Exam Questions & Answers

Prepare for the PRMIA Mathematical Foundations of Risk Measurement ? 2015 Edition 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.

QA4Exam focus on the latest syllabus and exam objectives, our practice Q&A are designed to help you identify key topics and solidify your understanding. By focusing on the core curriculum, These Questions & Answers helps you cover all the essential topics, ensuring you're well-prepared for every section of the exam. Each question comes with a detailed explanation, offering valuable insights and helping you to learn from your mistakes. Whether you're looking to assess your progress or dive deeper into complex topics, our updated Q&A will provide the support you need to confidently approach the PRMIA 8007 exam and achieve success.

The questions for 8007 were last updated on Nov 18, 2024.

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Question No. 1

You are to perform a simple linear regression using the dependent variable Y and the independent variable X (Y = a + bX). Suppose that cov(X,Y)=10, var(X)= 5, and that the mean of X is 1 and the mean of Y is 2. What are the values for the regression parameters a and b?

Ab=0.5, a=2.5

Bb=0.5, a=1.5

Cb=2, a=4

Db=2, a=0

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Correct Answer: D

Question No. 2

When a number is written with a fraction as an exponent, such as , which of the following is the correct computation?

ATake the square-root of 75 and raise it to the 5th power

BDivide 75 by 2, then raise it to the 5th power

CMultiply 75 by 2.5

DSquare 75, then take the fifth root of it

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Correct Answer: A

Question No. 3

A linear regression gives the following output:

Figures in square brackets are estimated standard errors of the coefficient estimates.

Which of the following is an approximate 95% confidence interval for the true value of the coefficient of ?

A[0, 1.5]

B[1, 2]

C[0, 3]

DNone of the above

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Correct Answer: C

Question No. 4

When calculating the implied volatility from an option price we use the bisection method and know initially that the volatility is somewhere between 1% and 100%. How many iterations do we need in order to determine the implied volatility with accuracy of 0.1%?

A10

B100

C25

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Correct Answer: A

Question No. 5

Let N(.) denote the cumulative distribution function of the standard normal probability distribution, and N' its derivative. Which of the following is false?

AN(0) = 0.5

BN'(0) 0

CN(x) 0 as x

DN'(x) 0 as x

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Correct Answer: C

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