PRMIA Mathematical Foundations of Risk Measurement – 2015 Edition 8007 Exam Practice Test

Consider two securities X and Y with the following 5 annual returns:

X: +10%, +3%, -2%, +3%, +5%

Y: +7%, -2%, +3%, -5%, +10%

In this case the sample covariance between the two time series can be calculated as:

On average, one trade fails every 10 days. What is the probability that no trade will fail tomorrow?

Which of the following statements concerning class intervals used for grouping of data is correct?

When grouping data, attention must be paid to the following with regards to class intervals:

1. Class intervals should not overlap

2. Class intervals should be of equal size unless there is a specific need to highlight data within a specific subgroup

3. The class intervals should be large enough so that they not obscure interesting variation within the group

Solve the simultaneous linear equations: x + 2y - 2 = 0 and y - 3x = 8

A quadratic form is

What is the 40th term in the following series: 4, 14, 30, 52, ...?

What is the maximum value of the function F(x, y)=x2+y2 in the domain defined by inequalities x 1, y -2, y-x 3 ?