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

  • Exam Code: 8007
  • Exam Name: Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition
  • Updated: Oct 20, 2026
  • Q&As: 133 Questions and Answers

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PRMIA 8007 Exam Syllabus Topics:

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

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

Question #1

An asset price S is lognormally distributed if:

  • A. ln(1+dS/S) is normally distributed
  • B. the change in price (dS) is normally distributed
  • C. 1/S is normally distributed
  • D. ln(dS/S) is normally distributed
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

Question #2

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

  • A. Divide 75 by 2, then raise it to the 5th power
  • B. Multiply 75 by 2.5
  • C. Take the square-root of 75 and raise it to the 5th power
  • D. Square 75, then take the fifth root of it
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

Question #3

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. 1.75
  • C. 1.95
  • D. 2
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

Question #4

A bond has modified duration 6 and convexity 30. Find the duration-convexity approximation to the percentage change in bond price when its yield increases by 5 basis points

  • A. 24 basis fall
  • B. 24 basis point rise
  • C. 30 basis points fall.
  • D. 10 basis point rise
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

Question #5

Simple linear regression involves one dependent variable, one independent variable and one error variable. In contrast, multiple linear regression uses...

  • A. Many dependent variables, many independent variables, many error variables
  • B. One dependent variable, many independent variables, one error variable
  • C. One dependent variable, one independent variable, many error variables
  • D. Many dependent variables, one independent variable, one error variable
Reveal Solution  Discussion  0

Correct Answer: B  🗳️

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