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PRMIA 8010 Exam - Topic 2 Question 68 Discussion

Which of the following are valid approaches for extreme value analysis given a dataset:1. The Block Maxima approach2. Least squares approach3. Maximum likelihood approach4. Peak-over-thresholds approach
C) 1 and 4
A) 2 and 3
B) 1, 3 and 4
D) All of the above

PRMIA 8010 Exam - Topic 2 Question 68 Discussion

Actual exam question for PRMIA's 8010 exam
Question #: 68
Topic #: 2
[All 8010 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 Felice at Mar 09, 2025, 02:13 PM

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Lashawnda
8 months ago
Least squares? Not sure that fits in extreme value analysis.
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Aliza
8 months ago
I think only 1, 3, and 4 are valid approaches.
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Tammara
9 months ago
Wait, all of them? That seems a bit much!
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Lawanda
9 months ago
Totally agree with B, those are the main ones!
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Shaunna
9 months ago
Block Maxima and Peak-over-thresholds are definitely valid!
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Curt
9 months ago
I feel like all of them could be valid in some context, but I lean towards just 1 and 4 being the main ones.
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Kristal
10 months ago
I practiced a similar question, and I believe options 1, 3, and 4 are the most common for extreme value analysis.
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Delpha
10 months ago
I think the Maximum Likelihood approach is definitely valid, but I can't recall if the Block Maxima is always used.
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Ma
10 months ago
I remember the Block Maxima and Peak-over-thresholds methods being discussed a lot in class, but I'm not entirely sure about the least squares approach.
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Shala
10 months ago
Hmm, I'm a bit confused by this question. I know the Block Maxima and Peak-over-thresholds approaches are used for extreme value analysis, but I'm not sure about the other two options. Maybe I should try to eliminate the ones I'm less sure about and see if that helps me narrow it down.
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Leatha
10 months ago
I'm pretty confident I know the answer to this one. The Block Maxima and Peak-over-thresholds approaches are definitely valid for extreme value analysis, and the Maximum likelihood approach is also a common technique. I'll mark B as my answer.
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Kami
11 months ago
Okay, let's see. The Block Maxima and Peak-over-thresholds approaches seem like they could be relevant, but I'm not sure about the Least squares and Maximum likelihood approaches. I'll need to review my notes on extreme value analysis to be sure.
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Dana
11 months ago
Hmm, this looks like a tricky one. I'll need to think carefully about the differences between these approaches and which ones are valid for extreme value analysis.
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Francene
1 year ago
The Peak-over-thresholds approach sounds like the most extreme way to analyze extreme values. I'm just picturing someone standing on a cliff, yelling 'PEAK!' every time a data point exceeds the threshold.
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Helaine
1 year ago
User 4: I agree, using a combination of different approaches can give a more comprehensive analysis.
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Delpha
1 year ago
User 3: I prefer the Maximum likelihood approach for a more statistical approach.
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Clarence
1 year ago
User 2: Yeah, it does sound intense. But it's one of the valid approaches for extreme value analysis.
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Albert
1 year ago
User 1: I think the Peak-over-thresholds approach is a bit dramatic.
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Jonell
1 year ago
I can't believe they're including the Least squares approach as an option. That's like using a hammer to perform open-heart surgery!
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Stevie
1 year ago
All of the approaches listed seem like they could be valid for extreme value analysis. This question is really testing our understanding of the different techniques, not just memorization.
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Eulah
1 year ago
User 3: I think all of the approaches listed could be valid for extreme value analysis.
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Lashanda
1 year ago
User 2: I believe it's actually 2 and 3 that are valid.
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Staci
1 year ago
User 1: I think the valid approaches for extreme value analysis are 1, 3, and 4.
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Lauran
1 year ago
Maximum likelihood is a standard technique for parameter estimation, so I'd expect it to be a valid approach for extreme value analysis. The question seems to be testing our knowledge of different statistical methods.
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Shalon
1 year ago
B) 1, 3 and 4
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Rikki
1 year ago
Maximum likelihood is commonly used for parameter estimation in extreme value analysis.
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Willodean
1 year ago
A) 2 and 3
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Nikita
1 year ago
I think the correct answer is D) All of the above because all the approaches mentioned can be used for extreme value analysis.
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Timothy
1 year ago
The Block Maxima approach and the Peak-over-thresholds approach seem to be the most relevant for extreme value analysis. I'm not sure why the Least squares approach would be considered valid here.
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Geraldine
1 year ago
Really? I didn't realize that. I thought it was just the Block Maxima and Peak-over-thresholds approaches.
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Felix
1 year ago
The Least squares approach is also valid for extreme value analysis.
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Luann
1 year ago
I agree, those two approaches are commonly used for extreme value analysis.
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Beckie
1 year ago
I think the Block Maxima approach and the Peak-over-thresholds approach are both valid.
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Karl
1 year ago
I believe the valid approaches are the Least squares approach and the Maximum likelihood approach.
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Valda
1 year ago
I think the valid approaches for extreme value analysis are the Block Maxima approach and the Peak-over-thresholds approach.
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