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PRMIA Exam 8010 Topic 1 Question 29 Discussion

Actual exam question for PRMIA's Operational Risk Manager (ORM) Exam exam
Question #: 29
Topic #: 1
[All Operational Risk Manager (ORM) Exam Questions]

A stock that follows the Weiner process has its future price determined by:

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Suggested Answer: D

The change in the price of a security that follows a Weiner process is determined by its standard deviation and expected return. To get the price itself, we need to add this change in price to the current price. Therefore the future price in a Weiner process is determined by all three of current price, expected return and standard deviation.


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