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

8007 Exam Simulator
  • Exam Code: 8007
  • Exam Name: Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition
  • Updated: Jul 17, 2026
  • Q & A: 133 Questions and Answers
  • PRMIA 8007 Q&A - in .pdf

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PRMIA 8007 Exam Syllabus Topics:

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

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

1. At what point x does the function f(x) = x3 - 4x2 + 1 have a local minimum?

A) -0.666666667
B) 2.66667
C) 0
D) 2


2. You work for a brokerage firm that charges its client x per share. The volume of trade of a client of type A depends on the per share commission in the following manner. If the commission is x, the client of type A will trade e-ax shares on average each week. What is the optimal commission x that maximizes the income from client A, noting that a is greater than zero?

A) a
B) 42
C) 1
D) a2


3. Newton-Raphson iteration is used to find a solution of x5 - x3 + x = 1. If xn = 2, what is xn+1?

A) 1.623
B) 0.377
C) 1.638
D) 2.362


4. Assume that 40% of all financial organizations investigated by authorities turn out to be fraudulent.
What is the probability of randomly investigating 2 different organizations and finding that neither is fraudulent; and what is the probability of finding exactly one being fraudulent?

A) 2/5 and 1/2
B) 9/25 and 12/25
C) 2/5 and 3/5
D) 1/3 and 8/17


5. Let X be a random variable normally distributed with zero mean and let . Then the correlation between X and Y is:

A) negative
B) positive
C) zero
D) not defined


Solutions:

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

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