PRMIA Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition : 8007 valid dumps

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Exam Code: 8007

Exam Name: Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition

Updated: Aug 24, 2026

Q & A: 133 Questions and Answers

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PRMIA 8007 Exam Syllabus Topics:

SectionObjectives
Topic 1: Regression and Time Series Analysis- Modeling Techniques
  • 1. Multivariate Regression
  • 2. Model Diagnostics
  • 3. Linear Regression
  • 4. Time Series Forecasting
Topic 2: Numerical Methods- Quantitative Techniques
  • 1. Monte Carlo Methods
  • 2. Numerical Approximation
  • 3. Simulation Techniques
  • 4. Optimization Methods
Topic 3: Probability Theory- Fundamental Probability Concepts
  • 1. Random Variables
  • 2. Conditional Probability
  • 3. Bayes' Theorem
  • 4. Probability Rules
Topic 4: Calculus- Differential and Integral Calculus
  • 1. Functions and Limits
  • 2. Integration
  • 3. Differentiation
  • 4. Multivariable Calculus
Topic 5: Risk Measurement Applications- Quantitative Risk Analysis
  • 1. Volatility Modeling
  • 2. Value at Risk Methodologies
  • 3. Portfolio Risk Measurement
  • 4. Sensitivity Analysis
Topic 6: Linear Algebra- Matrix Methods
  • 1. Covariance Matrices
  • 2. Matrix Operations
  • 3. Eigenvalues and Eigenvectors
  • 4. Positive Definiteness
Topic 7: Statistical Analysis- Descriptive and Inferential Statistics
  • 1. Moments and Distributions
  • 2. Hypothesis Testing
  • 3. Confidence Intervals
  • 4. Maximum Likelihood Estimation

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

1. 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) 9/16
C) 7/8
D) 11/16


2. 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) 0.5286
B) 0.5292
C) 0.5290
D) 0.5288


3. You invest $2m in a bank savings account with a constant interest rate of 5% p.a. What is the value of the investment in 2 years time if interest is compounded quarterly?

A) $2,210,342
B) $2.205,000
C) $2,208,972
D) None of them


4. Kurtosis(X) is defined as the fourth centred moment of X, divided by the square of the variance of X.
Assuming X is a normally distributed variable, what is Kurtosis(X)?

A) 1
B) 3
C) 2
D) 0


5. What is the angle between the following two three dimensional vectors: a=(1,2,3), b=(-4,2,0)?

A) 57 degrees
B) 180 degrees
C) 90 degrees
D) 45 degrees


Solutions:

Question # 1
Answer: D
Question # 2
Answer: D
Question # 3
Answer: C
Question # 4
Answer: B
Question # 5
Answer: C

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