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PRMIA 8010 Exam - Topic 1 Question 45 Discussion

Actual exam question for PRMIA's 8010 exam
Question #: 45
Topic #: 1
[All 8010 Questions]

The unexpected loss for a credit portfolio at a given VaR estimate is defined as:

Show Suggested Answer Hide Answer
Suggested Answer: C

For EVT, we use the block maxima or the peaks-over-threshold methods. These provide us the data points that can be fitted to a GEV distribution.

Least squares and maximum likelihood are methods that are used for curve fitting, and they have a variety of applications across risk management.


by Lizbeth at Apr 20, 2024, 02:11 PM

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Raymon
6 days ago
I agree, A is the correct choice!
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Markus
12 days ago
It's definitely max(Actual Loss - Expected Loss, 0).
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Wynell
18 days ago
I vaguely remember that unexpected loss is tied to the difference between VaR and expected loss, so maybe option D is correct?
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Jina
23 days ago
I feel like option C makes sense because it talks about actual loss and VaR, but I can't recall if that's the right way to define unexpected loss.
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Ronny
29 days ago
I remember practicing a similar question where we had to calculate the unexpected loss, and I think it involved using the maximum function to avoid negative values.
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Glenna
1 month ago
I think the unexpected loss is related to how much the actual loss exceeds the expected loss, but I'm not sure if it's just a straight subtraction.
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Mozell
1 month ago
Wait, I'm confused. Is the unexpected loss the same as the actual loss minus the VaR? Or is it the VaR minus the expected loss? I need to think this through more carefully.
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Britt
1 month ago
Okay, I think I've got it. The key is that the "unexpected loss" is defined as the maximum of the actual loss minus the expected loss, or 0. So option A seems to be the right answer here.
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Earleen
1 month ago
This looks like a straightforward definition question. I'll carefully read through the options and think about the key concepts involved to determine the correct answer.
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Edna
1 month ago
Hmm, I'm a bit unsure about this one. The wording seems a bit tricky, and I want to make sure I fully understand the relationship between actual loss, expected loss, and VaR. Let me re-read the question and options a few times.
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Janessa
1 month ago
I think the Order Guide is the way to go. It'll provide a centralized and structured way for managers to order the necessary items, which should make the process more streamlined and consistent.
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Mi
2 months ago
This seems straightforward to me. Option B, setting a 10% billing hold on the project costs in Expenditure Inquiry, looks like the most direct way to implement the withholding requirement based on the details provided. I'll focus on that approach in my exam response.
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Aliza
2 months ago
I think using an equal interval graph could help clarify things, but I'm not completely sure if that addresses the underlying issue in aggression frequency.
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Catarina
6 months ago
Well, if the unexpected loss is anything like my dating life, it's probably a lot more than the VaR estimate!
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Karl
5 months ago
C) Actual Loss - VaR
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Vonda
5 months ago
B) Actual Loss - Expected Loss
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Josphine
5 months ago
A) max(Actual Loss - Expected Loss, 0)
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Samuel
7 months ago
This is a tricky one, but I reckon A. max(Actual Loss - Expected Loss, 0) is the right answer. Gotta love these finance questions!
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Gennie
5 months ago
I'm going with C) Actual Loss - VaR, it just seems more logical to me.
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Lashandra
5 months ago
I think it's B) Actual Loss - Expected Loss, but I see why you chose A.
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Anjelica
5 months ago
I agree, A) max(Actual Loss - Expected Loss, 0) makes sense to me.
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Aleta
7 months ago
Wait, isn't the unexpected loss the difference between VaR and Expected Loss? So, I'm going with D. VaR - Expected Loss.
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Delila
5 months ago
Actually, I think you're right. It's D) VaR - Expected Loss
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Jennie
5 months ago
I'm pretty sure it's C) Actual Loss - VaR
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Truman
6 months ago
No, I believe it's B) Actual Loss - Expected Loss
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Catarina
6 months ago
I think it's A) max(Actual Loss - Expected Loss, 0)
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Adolph
7 months ago
I'm pretty sure it's C. Actual Loss - VaR. That's how I've always understood Value at Risk.
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Ashley
6 months ago
I agree with you, it's A. max(Actual Loss - Expected Loss, 0)
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Carma
6 months ago
I think it's actually A. max(Actual Loss - Expected Loss, 0)
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Alexia
7 months ago
Hmm, I think the answer is B. Actual Loss - Expected Loss. It just makes sense logically.
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Mitsue
6 months ago
I think it's D. VaR - Expected Loss
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Laticia
6 months ago
I'm not sure, but I think it might be C. Actual Loss - VaR
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Rodolfo
6 months ago
I disagree, I believe the answer is B. Actual Loss - Expected Loss
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Dannette
7 months ago
I think the answer is A. max(Actual Loss - Expected Loss, 0)
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Alberta
7 months ago
But doesn't VaR estimate the potential loss? So shouldn't it be D) VaR - Expected Loss?
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Yuki
7 months ago
I disagree, I believe the answer is B) Actual Loss - Expected Loss
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Alberta
7 months ago
I think the answer is A) max(Actual Loss - Expected Loss, 0)
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