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PRMIA 8007 valid - in .pdf

8007 pdf
  • Exam Code: 8007
  • Exam Name: Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition
  • Q & A: 133 Questions and Answers
  • PDF Price: $59.99
  • Free Demo

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  • Exam Code: 8007
  • Exam Name: Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition
  • Q & A: 133 Questions and Answers
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PRMIA 8007 valid - Testing Engine

8007 Testing Engine
  • Exam Code: 8007
  • Exam Name: Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition
  • Q & A: 133 Questions and Answers
  • Software Price: $59.99
  • Testing Engine

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PRMIA 8007 Exam Syllabus Topics:

SectionWeightObjectives
Statistics and Regression Analysis20%- Linear regression
  • 1. Hypothesis testing and confidence intervals
    • 2. Simple and multiple regression
      - Descriptive statistics
      • 1. Correlation and covariance
        • 2. Measures of location and dispersion
          Linear Algebra and Matrix Theory20%- Matrix operations
          • 1. Addition, multiplication, inversion
            • 2. Determinants and trace
              - Vectors and eigenvalues
              • 1. Diagonalization
                • 2. Eigenvalues and eigenvectors
                  Numerical Methods & Financial Mathematics15%- Time value of money
                  - Basics of risk modeling
                  - Root finding and approximation
                  Probability Theory25%- Basic probability concepts
                  • 1. Axioms and rules
                    • 2. Conditional probability and independence
                      - Random variables and distributions
                      • 1. Discrete and continuous distributions
                        • 2. Expected value, variance, covariance
                          Calculus and Functions20%- Multivariable calculus
                          • 1. Optimization
                            • 2. Partial derivatives
                              - Single-variable calculus
                              • 1. Derivatives and applications
                                • 2. Limits and continuity
                                  • 3. Integrals and applications

                                    PRMIA Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition Sample Questions:

                                    Question #1

                                    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:

                                    • A. 0.5292
                                    • B. 0.5286
                                    • C. 0.5290
                                    • D. 0.5288
                                    Answer: D
                                    Question #2

                                    A 95% confidence interval for a parameter estimate can be interpreted as follows:

                                    • A. The probability that the real value of the parameter is outside this interval is 95%.
                                    • B. The probability that the real value of the parameter is within this interval is 95%.
                                    • C. The probability that the estimated value of the parameter is outside this interval is 95%.
                                    • D. The probability that the estimated value of the parameter is within this interval is 95%.
                                    Answer: B
                                    Question #3

                                    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?

                                    • A. None of these
                                    • B. 7/8
                                    • C. 11/16
                                    • D. 9/16
                                    Answer: C
                                    Question #4

                                    A linear regression gives the following output:
                                    Figures in square brackets are estimated standard errors of the coefficient estimates. What is the value of the test statistic for the hypothesis that the coefficient of is zero against the alternative that is less than zero?

                                    • A. 2.5
                                    • B. -2.5
                                    • C. 0.125
                                    • D. -1.25
                                    Answer: B
                                    Question #5

                                    A 2-year bond has a yield of 5% and an annual coupon of 5%. What is the Modified Duration of the bond?

                                    • A. 1.86
                                    • B. 1.95
                                    • C. 1.75
                                    • D. 2
                                    Answer: A

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