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PRMIA 8007 Exam Dumps Questions and Answers

Exam Code: 8007
Certification: PRM Certification
Vendor: PRMIA
Last Update: Nov 21, 2024
Questions: 132
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87%  Questions came word by word from this dump
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Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition Questions and Answers

Questions 1

When calculating the implied volatility from an option price we use the bisection method and know initially that the volatility is somewhere between 1% and 100%. How many iterations do we need in order to determine the implied volatility with accuracy of 0.1%?

Options:

A.

10

B.

100

C.

25

D.

5

Questions 2

What is a Hessian?

Options:

A.

Correlation matrix of market indices

B.

The vector of partial derivatives of a contingent claim

C.

A matrix of second derivatives of a function

D.

The point at which a minimum of a multidimensional function is achieved

Questions 3

Which of the following can induce a 'multicollinearity' problem in a regression model?

Options:

A.

A large negative correlation between the dependent variable and one of the explanatory variables

B.

A high positive correlation between the dependent variable and one of the explanatory variables

C.

A high positive correlation between two explanatory variables

D.

The omission of a relevant explanatory variable