Free PRMIA 8011 Exam Dumps Questions & Answers

Which of the following techniques is used to generate multivariate normal random numbers that are correlated?

• A.  Markov process
• B.  Cholesky decomposition of the correlation matrix
• C.  Pseudo random number generator
• D.  Simulation

For a back office function processing 15,000 transactions a day with an error rate of 10 basis points, what is the annual expected loss frequency (assume 250 days in a year)

• A.  0.06
• B.  37500
• C.  375
• D.  3750

For a loan portfolio, unexpected losses are charged against:

• A.  Economic capital
• B.  Regulatory capital
• C.  Economic credit capital
• D.  Credit reserves

Which of the following is closest to the description of a 'risk functional'?

• A.  Risk functional refers to the Kolmogorov-Smirnov distance
• B.  A risk functional is the distribution that models the severity of a risk
• C.  A risk functional assigns a penalty value for the difference between a model distribution and a risk's severity distribution
• D.  A risk functional is a model distribution that is an approximation of the true loss distribution of a risk

Loss provisioning is intended to cover:

• A.  Expected losses
• B.  Losses in excess of unexpected losses
• C.  Both expected and unexpected losses
• D.  Unexpected losses