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

"Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition", also known as 8007 exam, is a PRMIA Certification. With the complete collection of questions and answers, BraindumpsPass has assembled to take you through 133 Q&As to your 8007 Exam preparation. In the 8007 exam resources, you will cover every field and category in PRM Certification helping to ready you for your successful PRMIA Certification.

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  • Exam Code: 8007
  • Exam Name: Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition
  • Certification Provider: PRMIA
  • Corresponding Certification: PRM
  • Updated: Jul 15, 2026
  • No. of Questions: 133 Questions & Answers with Testing Engine
  • Download Limit: Unlimited

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PRMIA 8007 Exam Syllabus Topics:

SectionObjectives
Topic 1: Probability and Statistics Foundations- Statistical inference
  • 1. Confidence intervals and hypothesis testing
    • 2. Estimation theory
      - Random variables and probability distributions
      • 1. Expectation, variance, and moments
        • 2. Discrete and continuous distributions
          Topic 2: Simulation and Numerical Methods- Monte Carlo simulation
          • 1. Risk distribution simulation
            • 2. Random number generation
              Topic 3: Risk Measurement Techniques- Volatility and correlation
              • 1. Correlation estimation techniques
                • 2. Variance-covariance methods
                  - Value at Risk (VaR)
                  • 1. Historical simulation approach
                    • 2. Parametric and non-parametric VaR
                      Topic 4: Stochastic Processes and Time Series- Stochastic processes basics
                      • 1. Brownian motion (introductory level)
                        • 2. Markov processes
                          - Time series analysis
                          • 1. AR, MA, and ARMA models
                            • 2. Autocorrelation and stationarity

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

                              1. What is the maximum value for f(x)= 8-(x+3)(x-3)?

                              A) 17
                              B) None of these
                              C) 8
                              D) -1


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


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

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


                              4. 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?

                              A) Changing the volatilities to be greater than 100%
                              B) Changing all the correlations to be zero
                              C) Changing all the correlations to be unity
                              D) All of the above


                              5. Identify the type and common element (that is, common ratio or common difference) of the following sequence: 6, 12, 24

                              A) arithmetic sequence, common ratio 2
                              B) geometric sequence, common ratio 3
                              C) geometric sequence, common ratio 2
                              D) arithmetic sequence, common difference 2


                              Solutions:

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

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