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PRMIA 8006 Exam Dumps Questions and Answers

Exam Code: 8006
Certification: PRM Certification
Vendor: PRMIA
Last Update: Dec 22, 2024
Questions: 287
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86%  Average Success In Real Exam
93%  Questions came word by word from this dump
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Exam I: Finance Theory Financial Instruments Financial Markets - 2015 Edition Questions and Answers

Questions 1

Which of the following statements is true:

I. The standard deviation of a short position is the same as the standard deviation of a long position

II. The expected return of a short position is the same as that a long position in the same asset

III. If two assets are perfectly positively correlated, then a short position in one and a long position in the other are negatively correlated

IV. If we increase the weight of an asset in a portfolio, its correlation with other assets in the portfolio scales up proportionately

Options:

A.

I, II, III and IV

B.

II and IV

C.

I and III

D.

II, III and IV

Questions 2

Which of the following statements are true?

I. The square-root-of-time rule for scaling volatility over time assumes returns on different days are independent

II. If daily returns are positively correlated, realized volatility will be less than that calculated using the square-root-of time rule

III. If daily returns are negatively correlated, realized volatility will be less than that calculated using the square-root-of-time rule

IV. If stock prices are said to follow a random walk, it means daily returns are independent of each other and have an expected value of zero

Options:

A.

I, II and IV

B.

III and IV

C.

I and III

D.

All the statements are correct

Questions 3

Which of the following statements is true in relation to an American style option:

I. Put-call parity applies to American options

II. An American put will never be cheaper than a European put

III. An American put option should never be exercised early for a non-dividend paying stock

IV. An American put option is always at least as valuable as its intrinsic value

Options:

A.

I, II and III

B.

II and III

C.

II and IV

D.

III and IV