Get a glimpse of the real 8007 certification exam challenges with our free PRMIA 8007 practice test questions.
Question 1
In a 2-step binomial tree, at each step the underlying price can move up by a factor of u = 1.1 or down by a factor of d = 1/u. The continuously compounded risk free interest rate over each time step is 1% and there are no dividends paid on the underlying. Use the Cox, Ross, Rubinstein parameterization to find the risk neutral probability and hence find the value of a European put option with strike 102, given that the underlying price is currently 100.
Question 2
A 2-step binomial tree is used to value an American put option with strike 104, given that the underlying price is currently 100. At each step the underlying price can move up by 20% or down by 20% and the risk-neutral probability of an up move is 0.55. There are no dividends paid on the underlying and the discretely compounded risk free interest rate over each time step is 2%. What is the value of the option in this model?
Question 3
Variance reduction is:
Question 4
You are to perform a simple linear regression using the dependent variable Y and the independent variable X (Y = a + bX). Suppose that cov(X,Y)=10, var(X)= 5, and that the mean of X is 1 and the mean of Y is 2. What are the values for the regression parameters a and b?
Question 5
Exploring a regression model for values of the independent variable that have not been observed is most accurately described as...
Master the Mathematical Foundations of Risk Measurement ? 2015 Edition 8007 exam like never before! You’ve reviewed the free 8007 practice questions, but the actual Professional Risk Managers certification exam demands more. Elevate your preparation with Certsmarket premium Professional Risk Managers 8007 practice exam questions.
Our Professional Risk Managers practice test questions are aligned with the current topics and meticulously mirror the Professional Risk Managers 8007 real exam.
Gain invaluable insights to address your knowledge gaps and boost your confidence with Certsmarket 8007 realistic practice questions. Invest in your PRMIA 8007 exam success today!
Get Preparation Material Now!
