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PRMIA Exam 8010 Topic 1 Question 45 Discussion

Actual exam question for PRMIA's Operational Risk Manager (ORM) Exam exam
Question #: 45
Topic #: 1
[All Operational Risk Manager (ORM) Exam Questions]

Which of the following are valid approaches for extreme value analysis given a dataset:

1. The Block Maxima approach

2. Least squares approach

3. Maximum likelihood approach

4. Peak-over-thresholds approach

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, 01:11 PM

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Edward
9 hours ago
D) All of the above
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Venita
1 days ago
Oh, it seems the Block Maxima approach, Maximum likelihood approach, and Peak-over-thresholds approach are all valid.
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Glory
2 days ago
B) 1, 3 and 4
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Venita
3 days ago
So, the valid approaches are the Least squares approach and the Maximum likelihood approach?
upvoted 0 times
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Mirta
5 days ago
A) 2 and 3
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Venita
5 days ago
Which of the following are valid approaches for extreme value analysis given a dataset?
upvoted 0 times
...

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