Free PRMIA 8007 Practice Exam with Questions & Answers | Set: 2

Finding parameter estimates of a given density function

Estimating the solution of a partial differential equation

Solving a portfolio optimization problem

Estimating the implied volatility of a simple European option

4.25

-4.25

4

2

6.49

5.03

4.59

4.54

3.6 and 7.15

3.4 and 3.84

3.5 and 3.45

None of these

1

0.5

0

None of the above

N(0) = 0.5

N'(0) ≥ 0

N(x) → 0 as x → ∞

N'(x) → 0 as x → ∞

The regression coefficient will be too high and the standard error of the regression coefficient will be understated

The regression coefficient will be too low and the standard error of the regression coefficient will be overstated

The regression coefficient will be unbiased, but the standard error of the regression coefficient will be understated

The regression coefficient will be unbiased, but the standard error of the regression coefficient will be overstated

-2.8

1.3

-1.2

None of the above

A technique that is applied in regression models to improve the accuracy of the coefficient estimates

A numerical method for finding portfolio weights to minimize the variance of a portfolio that has a given expected return

A numerical method for finding the variance of the underlying that is implicit in a market price of an option

A method for reducing the number of simulations required in a Monte Carlo simulation

4 and -2

-4 and 2

1 and 0

No real roots