PRMIA 8007 Exam Questions Instant Access - No Installation Required

Question 1

A bond has modified duration 6 and convexity 30. Find the duration-convexity approximation to the percentage change in bond price when its yield increases by 5 basis points

A10 basis point rise

B24 basis fall

C24 basis point rise

D30 basis points fall.

Answer : D

Question 2

For the function f(x) =3x-x3 which of the following is true?

Ax = 0 is a minimum

Bx = -3 is a maximum

Cx = 2 is a maximum

DNone of these

Answer : D

Question 3

A typical leptokurtotic distribution can be described as a distribution that is relative to a normal distribution

Apeaked and thin at the center and with heavy (fat) tails

Bpeaked and thin at the center and with thin tails

Cflat and thick at the center and with heavy (fat) tails

Dflat and thick at the center and with thin tails

Answer : A

Question 4

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

A240

B4598

C4840

D4960

Answer : C

Question 5

You intend to invest $100 000 for five years. Four different interest payment options are available. Choose the interest option that yields the highest return over the five year period.

Aa lump-sum payment of $22 500 on maturity (in five years)

Ban annually compounded rate of 4.15%

Ca quarterly-compounded rate of 4.1%

Da continuously-compounded rate of 4%

Answer : C

Question 6

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

Aarithmetic sequence, common difference 2

Barithmetic sequence, common ratio 2

Cgeometric sequence, common ratio 2

Dgeometric sequence, common ratio 3

Answer : C

Question 7

Which of the provided answers solves this system of equations?

2y -- 3x = 3y +x

y2 + x2 = 68

Ax = 1; y = square root of 67

Bx = 2; y = 8

Cx = 2; y = -8

Dx = -2; y = -8

Answer : C

PRMIA Mathematical Foundations of Risk Measurement â€“ 2015 Edition 8007 Exam Questions