Free PRMIA 8002 Exam Dumps Questions & Answers

An operational risk analyst models the occurrence of computer failures as a Poisson process with an arrival rate of 2 events per year. According to this model, what is the probability of zero failures in one year?

• A.  0.25
• B.  0.14
• C.  0.02
• D.  0.50

Every covariance matrix must be positive semi-definite. If it were not then:

• A.  All the above statements are true
• B.  There would be no Cholesky decomposition matrix
• C.  One or more of its eigenvalues would be negative
• D.  Some portfolios could have a negative variance

Maximum likelihood estimation is a method for:

• A.  Estimating the implied volatility of a simple European option
• B.  Finding parameter estimates of a given density function
• C.  Estimating the solution of a partial differential equation
• D.  Solving a portfolio optimization problem

Let f(x) = c for x in [0,4] and 0 for other values of x.
What is the value of the constant c that makes f(x) a probability density function; and what if f(x) = cx for x in [0,4]?

• A.  1/7 and 1/9
• B.  None of the above
• C.  1/4 and 1/7
• D.  1/4 and 1/6

Which of the following statements is true for symmetric positive definite matrices?

• A.  Its eigenvalues are all positive
• B.  If a is its eigenvalue, then is also its eigenvalue
• C.  If a is its eigenvalue, then -a is also its eigenvalue
• D.  One of its eigenvalues equals 0