8007 Practice Online

Question 1

I have a portfolio of two stocks. The weights are 60% and 40% respectively, the volatilities are both 20%, while the correlation of returns is 50%. The volatility of my portfolio is

A : 16%

B : 17.4%

C : 20%

D : 24.4%

Answer: B

Question 2

Assume that 40% of all financial organizations investigated by authorities turn out to be fraudulent.

What is the probability of randomly investigating 2 different organizations and finding that neither is fraudulent; and what is the probability of finding exactly one being fraudulent?

A : 2/5 and 1/2

B : 2/5 and 3/5

C : 1/3 and 8/17

D : 9/25 and 12/25

Answer: D

Question 3

Find the roots, if they exist in the real numbers, of the quadratic equation

A : 4 and -2

B : -4 and 2

C : 1 and 0

D : No real roots

Answer: D

Question 4

I have $5m to invest in two stocks: 75% of my capital is invested in stock 1 which has price 100 and the rest is invested in stock 2, which has price 125. If the price of stock 1 falls to 90 and the price of stock 2 rises to 150, what is the return on my portfolio?

A : -2.50%

B : -5%

C : 2.50%

D : 5%

Answer: A

Question 5

You are given the following values of a quadratic function f(x): f(0)=0, f(1)=-2, f(2)=-5. On the basis of these data, the derivative f'(0) is ...

A : in the interval ]-2.5,-2[

B : equal to -2

C : in the interval ]-2,+[

D : in the interval ]-,-2.5]

Answer: C

Name:	Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition
Exam Code:	8007
Certification:	PRM
Vendor:	PRMIA
Total Questions:	135
Last Updated:	Apr 25, 2024

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