8002 PRMIA PRM Certification - Exam II: Mathematical Foundations of Risk Measurement Free Practice Exam Questions (2025 Updated)
Prepare effectively for your PRMIA 8002 PRM Certification - Exam II: Mathematical Foundations of Risk Measurement certification with our extensive collection of free, high-quality practice questions. Each question is designed to mirror the actual exam format and objectives, complete with comprehensive answers and detailed explanations. Our materials are regularly updated for 2025, ensuring you have the most current resources to build confidence and succeed on your first attempt.
Over four consecutive years fund X returns 1%, 5%, -3%, 8%. What is the average growth rate of fund X over this period?
An underlying asset price is at 100, its annual volatility is 25% and the risk free interest rate is 5%. A European put option has a strike of 105 and a maturity of 90 days. Its Black-Scholes price is 7.11. The options sensitivities are: delta = -0.59; gamma = 0.03; vega = 19.29. Find the delta-gamma approximation to the new option price when the underlying asset price changes to 105
A 2-year bond has a yield of 5% and an annual coupon of 5%. What is the Modified Duration of the bond?
For each of the following functions, indicate whether its graph is concave or convex:
Y = 7x2 + 3x + 9
Y = 6 ln(3x)
Y = exp(-4x)
Identify the type and common element (that is, common ratio or common difference) of the following sequence: 6, 12, 24
If a time series has to be differenced twice in order to be transformed into a stationary series, the original series is said to be:
Which statement regarding the matrix below is true?
Consider the linear regression model for the returns of stock A and the returns of stock B. Stock A is 50% more volatile than stock B. Which of the following statements is TRUE?
A quadratic form is
Which of the following is a false statement concerning the probability density function and the cumulative distribution function of a random variable?
You are investigating the relationship between weather and stock market performance. To do this, you pick 100 stock market locations all over the world. For each location, you collect yesterday's mean temperature and humidity and yesterday's local index return. Performing a regression analysis on this data is an example of…
Consider two functions f(x) and g(x) with indefinite integrals F(x) and G(x), respectively. The indefinite integral of the product f(x)g(x) is given by
Every covariance matrix must be positive semi-definite. If it were not then:
On average, one trade fails every 10 days. What is the probability that no trade will fail tomorrow?
What is the simplest form of this expression: log2(165/2)
Let a, b and c be real numbers. Which of the following statements is true?
Suppose a discrete random variable can take on the values -1, 0 and 1 each with a probability of 1/3. Then the mean and variance of the variable is
Stress testing portfolios requires changing the asset volatilities and correlations to extreme values. Which of the following would lead to a non positive definite covariance matrix?
Which of the following statements is not correct?
