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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, 01:11 PM

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Norah
4 months ago
Nah, it's definitely not B or C.
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Cruz
5 months ago
I thought it was Actual Loss - VaR.
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Jeannine
5 months ago
Wait, is it really that simple?
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Raymon
5 months ago
I agree, A is the correct choice!
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Markus
5 months ago
It's definitely max(Actual Loss - Expected Loss, 0).
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Wynell
6 months 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
6 months 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
6 months 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
6 months 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
6 months 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
6 months 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
6 months 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
6 months 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
6 months 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
6 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
6 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
11 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
10 months ago
C) Actual Loss - VaR
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Vonda
10 months ago
B) Actual Loss - Expected Loss
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Josphine
10 months ago
A) max(Actual Loss - Expected Loss, 0)
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Samuel
12 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
10 months ago
I'm going with C) Actual Loss - VaR, it just seems more logical to me.
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Lashandra
10 months ago
I think it's B) Actual Loss - Expected Loss, but I see why you chose A.
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Anjelica
10 months ago
I agree, A) max(Actual Loss - Expected Loss, 0) makes sense to me.
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Aleta
12 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
10 months ago
Actually, I think you're right. It's D) VaR - Expected Loss
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Jennie
10 months ago
I'm pretty sure it's C) Actual Loss - VaR
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Truman
11 months ago
No, I believe it's B) Actual Loss - Expected Loss
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Catarina
11 months ago
I think it's A) max(Actual Loss - Expected Loss, 0)
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Adolph
12 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
11 months ago
I agree with you, it's A. max(Actual Loss - Expected Loss, 0)
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Carma
11 months ago
I think it's actually A. max(Actual Loss - Expected Loss, 0)
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Alexia
1 year ago
Hmm, I think the answer is B. Actual Loss - Expected Loss. It just makes sense logically.
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Mitsue
10 months ago
I think it's D. VaR - Expected Loss
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Laticia
11 months ago
I'm not sure, but I think it might be C. Actual Loss - VaR
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Rodolfo
11 months ago
I disagree, I believe the answer is B. Actual Loss - Expected Loss
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Dannette
12 months ago
I think the answer is A. max(Actual Loss - Expected Loss, 0)
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Alberta
1 year ago
But doesn't VaR estimate the potential loss? So shouldn't it be D) VaR - Expected Loss?
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Yuki
1 year ago
I disagree, I believe the answer is B) Actual Loss - Expected Loss
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Alberta
1 year ago
I think the answer is A) max(Actual Loss - Expected Loss, 0)
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