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PRMIA Exam 8010 Topic 1 Question 31 Discussion

Actual exam question for PRMIA's 8010 exam
Question #: 31
Topic #: 1
[All 8010 Questions]

Which of the following statements are correct?

1. A reliance upon conditional probabilities and a-priori views of probabilities is called the 'frequentist' view

2. Knightian uncertainty refers to things that might happen but for which probabilities cannot be evaluated

3. Risk mitigation and risk elimination are approaches to reacting to identified risks

4. Confidence accounting is a reference to the accounting frauds that were seen in the past decade as a reflection of failed governance processes

Show Suggested Answer Hide Answer
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.


Contribute your Thoughts:

Tyisha
15 days ago
Wait, is 'Knightian uncertainty' a real thing? Did someone just make that up to confuse us? I'm going to pretend I know what that means and go with option D.
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Elvera
24 days ago
Confidence accounting? Sounds like an attempt at humor, but I have no idea what that means. I'm going to have to go with option B, as it seems the most straightforward.
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Micah
3 days ago
I think Knightian uncertainty refers to things that might happen but for which probabilities cannot be evaluated.
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Deeanna
25 days ago
Risk mitigation and elimination are definitely approaches to dealing with risks, so option 3 is spot on. But I'm not sure about the other options.
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Cyndy
18 days ago
User 1: I think option 3 is correct, risk mitigation and elimination are important strategies.
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Eveline
1 months ago
Knightian uncertainty is a great concept, and option 2 definitely captures it. As for the other options, I'm a bit unsure.
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Annelle
1 months ago
I believe all the statements are correct, so I would go with option D.
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Flo
1 months ago
I agree with Kip, Knightian uncertainty and risk mitigation make sense.
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Kip
1 months ago
I think the correct statements are 2 and 3.
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Malcolm
1 months ago
I'm not sure, but I think option D might be correct because it includes all statements.
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Virgilio
2 months ago
I agree with Arlette, option B seems right.
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Arlette
2 months ago
I think option B is correct.
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Mary
2 months ago
The 'frequentist' view is definitely about conditional probabilities, not the other way around. I'm pretty sure option 1 is correct.
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Jesusita
12 days ago
I believe option 4 is incorrect. Confidence accounting is not related to accounting frauds.
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Delila
13 days ago
I'm not sure about option 3. Risk mitigation and risk elimination sound similar to me.
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Fidelia
24 days ago
I think option 2 is also correct. Knightian uncertainty does refer to things with unknown probabilities.
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Shawn
1 months ago
I agree, option 1 is correct. The 'frequentist' view is all about conditional probabilities.
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