PRMIA 8010 Exam - Topic 1 Question 35 Discussion

Actual exam question for PRMIA's 8010 exam

Question #: 35
Topic #: 1

[All 8010 Questions]

Which of the following is not one of the 'three pillars' specified in the Basel accord:

AMarket discipline

BSupervisory review

CNational regulation

DMinimum capital requirements

Show Suggested Answer

Suggested Answer: B

Extreme value theory focuses on the extreme and rare events, and in the case of VaR calculations, it is focused on the right tail of the loss distribution. In very simple and non-technical terms, EVT says the following:

1. Pull a number of large iid random samples from the population,

2. For each sample, find the maximum,

3. Then the distribution of these maximum values will follow a Generalized Extreme Value distribution.

(In some ways, it is parallel to the central limit theorem which says that the the mean of a large number of random samples pulled from any population follows a normal distribution, regardless of the distribution of the underlying population.)

Generalized Extreme Value (GEV) distributions have three parameters: (shape parameter), (location parameter) and (scale parameter). Based upon the value of , a GEV distribution may either be a Frechet, Weibull or a Gumbel. These are the only three types of extreme value distributions.

by Truman at Oct 02, 2023, 05:02 PM

Limited Time Offer

25%

Off

Get Premium 8010 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Margurite

9 months ago

Wait, are we sure about that? I thought it was included somewhere.

upvoted 0 times

...

Haley

9 months ago

100% agree, National Regulation isn’t one of them.

upvoted 0 times

...

Shonda

9 months ago

I thought National Regulation was part of it. Surprised to learn it’s not!

upvoted 0 times

...

Clay

10 months ago

Definitely not National Regulation!

upvoted 0 times

...

Malcom

10 months ago

The three pillars are actually Minimum Capital Requirements, Supervisory Review, and Market Discipline.

upvoted 0 times

...

Alaine

10 months ago

I’m a bit confused; I thought "Supervisory review" was part of it, but now I'm second-guessing myself on "Market discipline."

upvoted 0 times

...

Aleshia

10 months ago

I feel like "Minimum capital requirements" is definitely one of the pillars, but I can't recall the others clearly.

upvoted 0 times

...

Monroe

10 months ago

I remember practicing a question similar to this, and I think "National regulation" isn't one of the pillars.

upvoted 0 times

...

Stacey

11 months ago

I think the three pillars are related to capital, supervision, and market discipline, but I'm not sure about the exact terms.

upvoted 0 times

...

Lera

11 months ago

I'm confident that the three pillars are minimum capital requirements, supervisory review, and market discipline. So the answer that is not a pillar is C, national regulation.

upvoted 0 times

...

Emilio

11 months ago

Ah, I've got it! The three pillars are minimum capital requirements, supervisory review, and market discipline. So the answer that is not one of the pillars is C, national regulation.

upvoted 0 times

...

Olene

11 months ago

I'm a bit unsure about this one. The three pillars are something I've studied, but I can't quite remember them all. I'll have to think it through carefully.

upvoted 0 times

...

Chanel

11 months ago

Okay, let's see... I know the three pillars are minimum capital requirements, supervisory review, and market discipline. So the answer must be C, national regulation.

upvoted 0 times

...

Nieves

11 months ago

Hmm, this seems straightforward. I'll need to recall the three pillars of the Basel accord to determine which one is not listed.

upvoted 0 times

...

Franchesca

11 months ago

The Cisco NX-OS SDK seems like it could be useful for verifying the code, but I'm not sure if that's the best choice here. I'll have to think this through a bit more.

upvoted 0 times

...

Lura

11 months ago

Hmm, this seems straightforward. I'll read through the options carefully and think about the context provided in the question.

upvoted 0 times

...

Lorrine

11 months ago

This seems like a straightforward question. I'll focus on creating the purchase agreement with the key details - the quantity, price, and expiration date.

upvoted 0 times

...