PRMIA PRM Certification - Exam II: Mathematical Foundations of Risk Measurement

PRMIA PRM Certification - Exam II: Mathematical Foundations of Risk Measurement - 8002 Exam Questions

QUESTION NO: 1
What is the maximum value for f(x)= 8-(x+3)(x-3)?

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

Correct Answer: A

QUESTION NO: 2
You want to test the hypothesis that a population parameter of a regression model is zero. Your alternative hypothesis is that 0. Denote by SD() the estimated standard deviation of , and by MEAN() the estimated mean of . Which test statistic is appropriate, and what is its distribution?

A. test statistic = MEAN()/SD(), normal distribution B. test statistic = MEAN()/SD(), t distribution C. test statistic = SD()/MEAN(), t distribution D. test statistic = SD()/MEAN(), normal distribution

Correct Answer: B

QUESTION NO: 3
Find the roots, if they exist in the real numbers, of the quadratic equation

A. -4 and 2 B. 4 and -2 C. 1 and 0 D. No real roots

Correct Answer: D

QUESTION NO: 4
You invest $100 000 for 3 years at a continuously compounded rate of 3%. At the end of 3 years, you redeem the investment. Taxes of 22% are applied at the time of redemption. What is your approximate after-tax profit from the investment, rounded to $10?

A. $7350 B. $9420 C. $7230 D. $7100

Correct Answer: A

QUESTION NO: 5
Let f(x) = c for x in [0,4] and 0 for other values of x.
What is the value of the constant c that makes f(x) a probability density function; and what if f(x) = cx for x in [0,4]?

A. 1/7 and 1/9 B. 1/4 and 1/6 C. 1/4 and 1/7 D. None of the above

Correct Answer: D

QUESTION NO: 6
Let X be a random variable distributed normally with mean 0 and standard deviation 1. What is the expected value of exp(X)?

A. E(exp(X)) = 1 B. E(exp(X)) = 0.6065 C. E(exp(X)) = 1.6487 D. E(exp(X)) = 2.7183

Correct Answer: C