PRMIA Mathematical Foundations of Risk Measurement :II Exam

Certification Provider: PRMIA

Exam Name: Mathematical Foundations of Risk Measurement :II

Duration: 120 Minutes

Number of questions in our database: 132

Exam Version: Nov. 27, 2023

Exam Official Topics:

Topic 1: Describe Rules of algebraic operations
Topic 2: Describe various forms of data
Topic 3: Explain the concept of differentiation.

Free PRMIA Mathematical Foundations of Risk Measurement :II Exam Actual Questions

The questions for Mathematical Foundations of Risk Measurement :II were last updated On Nov. 27, 2023

Question #1

What can be said about observations of random variables that are i.i.d. a normally distributed?

AThe estimated mean divided by the estimated variance has a t-distribution

BThe estimated mean divided by the estimated variance has a Chi2-distribution

CThe estimated mean divided by the estimated standard deviation has a t-distribution

DThe estimated mean divided by the estimated standard deviation has a Chi2-distribution

Reveal Solution

Correct Answer: C

Question #2

In statistical hypothesis tests, 'Type I error' refers to the situation in which...

AThe null hypothesis is accepted when in fact it should have been rejected

BThe null hypothesis is rejected when in fact it should have been accepted

CBoth null hypothesis and alternative hypothesis are rejected

DBoth null hypothesis and alternative hypothesis are accepted

Reveal Solution

Correct Answer: B

Question #3

The gradient of a smooth function is

Aa vector that shows the direction of fastest change of a function

Bmatrix of second partial derivatives of a function

Cinfinite at a maximum point

Da matrix containing the function's second partial derivatives

Reveal Solution

Correct Answer: A

Question #4

Which of the following can induce a 'multicollinearity' problem in a regression model?

AA large negative correlation between the dependent variable and one of the explanatory variables

BA high positive correlation between the dependent variable and one of the explanatory variables

CA high positive correlation between two explanatory variables

DThe omission of a relevant explanatory variable

Reveal Solution

Correct Answer: C

Question #5

When the errors in a linear regression show signs of positive autocorrelation, which of the statements below is true?

AThe regression coefficient will be too high and the standard error of the regression coefficient will be understated

BThe regression coefficient will be too low and the standard error of the regression coefficient will be overstated

CThe regression coefficient will be unbiased, but the standard error of the regression coefficient will be understated

DThe regression coefficient will be unbiased, but the standard error of the regression coefficient will be overstated

Reveal Solution

Correct Answer: D

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