Updated: Sep 01, 2026
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| Certification Vendor: | PRMIA |
|---|---|
| Exam Name: | Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition |
| Exam Number: | 8007 |
| Exam Duration: | 120 minutes |
| Real Exam Qty: | 24 |
| Related Certifications: | Exam III: Risk Management Frameworks, Operational Risk, Credit Risk, Counterparty Risk, Market Risk, ALM, FTP - 2015 Edition Exam I: Finance Theory, Financial Instruments and Financial Markets - 2015 Edition Professional Risk Manager (PRM) Certification Exam IV: Case Studies, Standards, Governance, Best Practices and Ethics - 2015 Edition |
| Exam Price: | USD 200 |
| Available Languages: | English |
| Exam Format: | Multiple Choice |
| Passing Score: | 60% |
| Certificate Validity Period: | Part of PRM Certification Program; exam credits remain valid subject to PRMIA certification policies |
| Sample Questions: | PRMIA 8007 Sample Questions |
| Exam Way: | Computer-based testing through authorized PRMIA testing providers; available at testing centers and online where offered. |
| Pre Condition: | No formal prerequisite examination required. Candidates pursuing the PRM designation must successfully complete all required PRM examinations and satisfy PRMIA certification requirements. |
| Official Syllabus URL: | https://prmia.org/ |
| Section | Objectives |
|---|---|
| Topic 1: Numerical Methods | - Quantitative Techniques
|
| Topic 2: Linear Algebra | - Matrix Methods
|
| Topic 3: Statistical Analysis | - Descriptive and Inferential Statistics
|
| Topic 4: Regression and Time Series Analysis | - Modeling Techniques
|
| Topic 5: Calculus | - Differential and Integral Calculus
|
| Topic 6: Risk Measurement Applications | - Quantitative Risk Analysis
|
| Topic 7: Probability Theory | - Fundamental Probability Concepts
|
Question 1
If the annual volatility of returns is 25% what is the variance of the quarterly returns?
A. 0.0156
B. 0.0625
C. 0.1250
D. None of the above
Question 2
In statistical hypothesis tests, 'Type I error' refers to the situation in which...
A. The null hypothesis is accepted when in fact it should have been rejected
B. Both null hypothesis and alternative hypothesis are accepted
C. The null hypothesis is rejected when in fact it should have been accepted
D. Both null hypothesis and alternative hypothesis are rejected
Question 3
The Newton-Raphson method
A. is based on Taylor series and uses the first derivative
B. is based on finding a middle point between left and right end of the search interval
C. can be used for continuous but not differentiable functions
D. does provide an error bound along with every iteration
Question 4
Which of the following is a false statement concerning the probability density function and the cumulative distribution function of a random variable?
A. the PDF is non-negative.
B. the CDF approaches 1 as its argument approaches infinity.
C. the definite integral of the PDF from minus infinity to plus infinity is zero.
D. the definite integral of the CDF from minus infinity to plus infinity is undefined.
Question 5
Which of the following statements is not correct?
A. A function is a rule that assigns to every value x at least one value of y.
B. A function is defined by its domain together with its action.
C. For finite and small domains, the action of a function may be specified by a list.
D. Every linear function is also a quadratic function.
Solutions:
| Question 1 Answer: A | Question 2 Answer: C | Question 3 Answer: A | Question 4 Answer: C | Question 5 Answer: A |
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