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8002 - II- Mathematical Foundations of Risk Measurement - Dump Information

Vendor : PRMIA
Exam Code : 8002
Exam Name : II- Mathematical Foundations of Risk Measurement
Questions and Answers : 132 Q & A
Updated On : Click to Check Update
PDF Download Mirror : 8002 Brain Dump
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8002 Questions and Answers

Pass4sure 8002 Dumps with Real Questions & Practice Test


QUESTION: 124

What is a Hessian?


  1. Correlation matrix of market indices

  2. The vector of partial derivatives of a contingent claim

  3. A matrix of second derivatives of a function

  4. The point at which a minimum of a multidimensional function is achieved


Answer: C


QUESTION: 125

The Newton-Raphson method


  1. is based on finding a middle point between left and right end of the search interval

  2. is based on Taylor series and uses the first derivative

  3. can be used for continuous but not differentiable functions

  4. does provide an error bound along with every iteration


Answer: B


QUESTION: 126

The gradient of a smooth function is


  1. a vector that shows the direction of fastest change of a function

  2. matrix of second partial derivatives of a function

  3. infinite at a maximum point

  4. a matrix containing the function's second partial derivatives


Answer: A


QUESTION: 127

The gradient of a function f(x, y, z) = x + y2 - x y z at the point x = y = z = 1 is


A. (0, 2, 1)

B. (0, 0, 0)


C. (1, 1, 1)

D. (0, 1, -1)


Answer: D


QUESTION: 128

Variance reduction is:


  1. A technique that is applied in regression models to improve the accuracy of the coefficient estimates

  2. A numerical method for finding portfolio weights to minimize the variance of a portfolio that has a given expected return

  3. A numerical method for finding the variance of the underlying that is implicit in a market price of an option

  4. A method for reducing the number of simulations required in a Monte Carlo simulation


Answer: D


QUESTION: 129

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?


A. 11.82

B. 12.33

C. 12.49

D. 12.78


Answer: C


QUESTION: 130

In a binomial tree lattice, at each step the underlying price can move up by a factor of u =

1.1 or down by a factor of . The continuously compounded risk free interest rate over each time step is 1% and there are no dividends paid on the underlying. The risk neutral probability for an up move is:


A. 0.5290

B. 0.5292

C. 0.5286

D. 0.5288


Answer: D


QUESTION: 131

A 2-step binomial tree is used to value an American put option with strike 105, given that the underlying price is currently 100. At each step the underlying price can move up by 10 or down by 10 and the risk-neutral probability of an up move is 0.6. There are no dividends paid on the underlying and the continuously compounded risk free interest rate over each time step is 1%. What is the value of the option in this model?


  1. 7.12

  2. 6.59

  3. 7.44

  4. 7.29


Answer: A


QUESTION: 132

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.


  1. 5.19

  2. 5.66

  3. 6.31

  4. 4.18


Answer: C


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Barr that a four-web page memo to Congress describing the primary conclusions of the investigation into President Trump ‘did not utterly capture the context, nature, and substance’ of Mueller’s work. … “A day after Mueller despatched his letter to Barr, both guys spoke through telephone for about quarter-hour, in accordance with legislation enforcement officers.” WaPo -- MUELLER TO BARR: “there is now public confusion about vital features of the consequences of our investigation. This threatens to undermine a primary intention for which the department appointed the special tips: to assure full public self assurance within the effect of the investigations.” -- WHAT DOJ IS announcing … SPOX KERRI KUPEC: “The special guidance emphasised that nothing within the legal professional everyday’s March 24 letter turned into inaccurate or deceptive. however, he expressed frustration over the inability of context and the ensuing media insurance regarding the particular guidance’s obstruction evaluation. They then discussed no matter if extra context from the record could be positive and could be rapidly launched. besides the fact that children, the legal professional widespread ultimately decided that it might no longer be productive to unencumber the file in piecemeal fashion.” “The lawyer ordinary and the special counsel agreed to get the entire file out with imperative redactions as expeditiously as viable. tomorrow, the attorney frequent sent a letter to Congress reiterating that his March 24 letter turned into no longer supposed to be a summary of the document, however instead only cited the special guidance’s major conclusions, and volunteered to testify before each Senate and condo Judiciary Committees on may 1st and 2nd.” more from Natasha Bertrand, Darren Samuelsohn, Josh Gerstein and Kyle Cheney -- ELIANA JOHNSON: “How bill Barr became a GOP heartthrob: The attorney conventional didn’t want to serve Donald Trump. but he did want to fight for a conception of presidential vigor.” first rate Wednesday morning. Blake Hounshell here with Daniel Lippman, filling in for Jake and Anna. INFRASTRUCTURE newest -- “in the back of the 1-day stop hearth between Donald, Chuck and Nancy,” by using Anita Kumar, Sarah Ferris and Burgess Everett: “[O]n Tuesday, Trump, Nancy Pelosi and Chuck Schumer did anything few individuals expected: They got alongside — or as a minimum pretended to. “After a 90-minute Oval workplace assembly to talk about a possible infrastructure bill, each side gushed about what can also have been their first point of settlement this 12 months, on a plan to spend $2 trillion to restore crumbling roads and bridges. certainly not intellect that they left unresolved a way to foot the gigantic bill.” POLITICO JAKE’S TAKE: The rationale Congress hasn’t handed a big-time infrastructure invoice for a very long time isn't since the establishment has loved watching the nation’s bridges, tunnels and roads collapse. It’s because infrastructure is expensive, and finding out a means to pay for it has in no way been handy. THE DEMOCRATS’ position appears to be, partly, a attention of that problem. The president must determine the $2 trillion funding move which will get enough Senate Republicans on his facet, they’re announcing. there was SOME openness to raising the gas tax, which hasn’t been raised in 23 years. but there’s palpable worry that hiking the tax will cause essential internal strife in the Republican birthday party, setting up a vote that would be viewed as a tax-hike litmus check. but if President DONALD TRUMP helps a fuel tax, that may help. ONE query WE’VE GOTTEN a bunch these days, together with from Kasie Hunt to Jake on MSNBC: Who wins right here? If a deal comes together -- and it’s too early to assert both approach -- who reaps the political rewards? A a success deal can be a large boon to Trump, who would be capable of say he's the dealmaker he promised to be and may even work with Democrats, who were investigating him. If it falls apart, Trump probably also benefits: He can say Democrats couldn’t even say sure to a $2 trillion jobs undertaking! VENEZUELA latest -- “Venezuelan Opposition leader Steps Up power, however Maduro Holds On”: NYT … “Pompeo claims Russia stopped Maduro leaving Venezuela for Cuba”: CNN … “Guaido’s excessive-chance Gamble Flops as Maduro keeps Grip on defense force”: Bloomberg … “Guaido calls for extra street protests Wednesday”: AP -- POMPEO to CNN ultimate evening: “[Maduro] had an plane on the tarmac, he turned into able to go away this morning as we remember it and the Russians indicated he should still stay. … He changed into headed for Havana.” NEW POLITICO/Morning talk to ballot: “Voters say Trump’s Twitter use could charge him reelection,” by means of Steve Shepard A message from Google: chuffed countrywide Small business Week! grow with Google is assisting small groups all throughout the U.S. through free digital potential workshops, 1:1 coaching, and tools and supplies to help them succeed. gain knowledge of greater at grow.google/local-agencies. MAYOR PETE -- according to Yashar Ali’s e-newsletter, Democratic presidential hopeful Pete Buttigieg currently dined with Oprah Winfrey. “[T]he lunch took region on Sunday at the domestic of a mutual buddy in l. a.,” he writes. In an interview with The Hollywood Reporter, Oprah says she’s analyzing Buttigieg’s memoir: “I name him Buttabeep, Buttaboop.” THR A PHRASE YOU’LL HEAR frequently -- Previewing how Republicans will cast Democratic frontrunner Joe Biden as the candidate of the reputation quo, Trump crusade manager Brad Parscale pointed out this on Fox news on Tuesday: “in the forty years that Biden has been in govt …” FED WATCH -- “Stephen Moore in peril: ‘I don’t imagine he can get the votes,’” through Burgess Everett and Victoria Guida A message from Google: Advertisement Image expertise is a crucial device for small corporations constructing toward their futures. Google can aid with free digital competencies workshops across the U.S. learn greater. SPEAKER NANCY PELOSI is rolling out new, more aggressive messaging these days that makes the element that Trump “is the primary to concern a blanket coverage of refusing to reply to Congressional inquiries on any and every difficulty, defying Congress’ constitutional authority and moving the nation into unchartered territory,” per her workplace. The document TRUMP’S WEDNESDAY -- The president is meeting with individuals of Congress at 2:15 p.m. within the White apartment. At 6:30 p.m., he’s joining the first lady and the Pences for a dinner within the State eating Room of the White residence to mark the countrywide Day of Prayer. Then, at 8 p.m., Fox enterprise network will air Trump’s interview with host Trish Regan. PLAYBOOK READS image DU JOUR: An opponent to Venezuelan President Nicolas Maduro carrying a Venezuelan flag covers his face amid tear gasoline fired via troopers loyal to Maduro all through an attempted military rebellion to oust Maduro in Caracas. | Boris Vergara/AP image greater OMB STAFFERS stream TO THE WHITE condo, per Nancy cook dinner: appearing chief of team of workers Mick Mulvaney’s aides proceed to stock the White condominium with staffers from the workplace of management and budget, the company he ran for roughly two years. among the many latest hires are AJ Sugarman, who's becoming a member of the White condominium’s legislative affairs group, and John grey, the budget agency’s acting chief of personnel, who's relocating to VP Mike Pence’s workplace to work on coverage. because Mulvaney moved into the West Wing in late December, he’s now introduced over 10 staffers from OMB and CFPB. White condo staffers are evaluating him to Trump’s first chief of staff, Reince Priebus, who went out of his method to rent operatives from the RNC. A senior administration respectable talked about these hires had been approved with the aid of longtime Mulvaney aide and major deputy chief of group of workers, Emma Doyle. Mulvaney in my view did not push for these hires, and they are all promotions in response to benefit, the official delivered. Over at OMB, Wesley Denton will soon serve as the acting chief of body of workers in grey’s absence until the agency could make a everlasting hire. Denton currently joined the agency as a proper communications staffer and previously labored for Jim DeMint’s company, the Conservative Partnership Institute, as smartly as the Heritage foundation. A message from Google: Advertisement Image Google gives small organizations with equipment and substances they can use to grow. learn greater. on your RADAR -- “Congressional Democrats notch win in emoluments go well with in opposition t Trump,” through Josh Gerstein: “Democratic lawmakers scored yet another victory Tuesday in their lawsuit accusing President Donald Trump of violating the constitution by using doing company with international governments. “U.S. District court docket decide Emmet Sullivan rejected the Justice branch’s argument that the time period ‘emolument’ in the constitution may still be study narrowly to observe to funds that amounted to bribes for reliable presidential moves.” POLITICO DEBATE STAGE update -- Rep. Eric Swalwell (D-Calif.) certified for the early Democratic presidential primary Tuesday, with CNN’s country wide poll being the third qualifying poll to show him above at the least 1%. campaign professional’s Zach Montellaro and Steve Shepard have tracked sixteen candidates who've certified thus far -- but questions about the methodology for a couple of polls are leaving the destiny of some borderline candidates, like Rep. Tim Ryan (D-Ohio) and Montana Gov. Steve Bullock, unclear. bear in mind ROY MOORE? -- His wife Kayla despatched out a fundraising e-mail Tuesday saying he’s “seriously on account that one more run for the U.S. Senate” and that Brett Kavanaugh’s confirmation to the Supreme courtroom recommended he might win. The e-mail POLITICO Playbook newsletter sign up today to receive the #1-rated e-newsletter in politics by way of signing up you agree to receive email newsletters or signals from POLITICO. you can unsubscribe at any time. HMM -- “U.S. militia Stops Counting How tons of Afghanistan Is managed with the aid of Taliban,” with the aid of NYT’s David Zucchino in Kabul: “The American military command in Afghanistan has halted normal assessments of what number of individuals and districts the executive and insurgents there handle, it emerged on Wednesday — putting off what has long been an important public measure of development within the war. The militia said the assessments had ‘restrained determination-making price’ for commanders. “As recently as November 2017, the previous American commander in Afghanistan had called them ‘the metric that’s most telling in a counterinsurgency.’ The decision to conclusion the assessments, which had been produced in various types given that at the least 2010, become posted in the newest quarterly record by using the American particular inspector established for Afghanistan reconstruction.” NYT TRUMP INC. -- “At Trump golf path, undocumented employees noted they have been now and again advised to work added hours with out pay,” with the aid of WaPo’s Josh Partlow and David Fahrenthold in Hillsdale, N.Y.: “His bosses on the Trump nation club called it ‘side work.’ On some nights, after the membership’s Grille Room closed, head waiter Jose Gabriel Juarez — an undocumented immigrant from Mexico — changed into instructed to clock out. He pressed his index finger onto a scanner and typed his very own code, 436. however he didn’t go domestic. as an alternative — on orders from his bosses, Juarez noted — he would dwell on, once in a while past hour of darkness. “He vacuumed carpets, polished silverware and helped get the restaurant at Trump countrywide Golf membership Westchester in Briarcliff Manor, N.Y., equipped for breakfast the next day. All off the clock. without being paid. … “Allegations that employees had been mechanically shortchanged on their pay at President Trump’s suburban country membership are now the subject of an inquiry with the aid of the new york attorney conventional, whose investigators have interviewed more than two dozen former personnel. … In interviews, six former Trump employees informed The Washington post that they felt systematically cheated because they have been undocumented.” WaPo HOLLYWOODLAND -- “The Obamas and Netflix just revealed the shows and flicks They’re working on,” by way of NYT’s John Koblin: “‘American manufacturing unit,’ a documentary that examines existence in Ohio where a chinese billionaire opened a factory in a former time-honored Motors plant and hired 2,000 people. … ‘Bloom,’ a drama sequence set in submit-World war II long island a good way to explore the ‘barriers confronted via ladies and by using people of color in an era marked by means of hurdles but additionally tremendous progress.’ … a film adaptation of ‘Frederick Douglass: Prophet of Freedom,’ the Pulitzer Prize-winning biography by using David W. Blight. … “An adaptation of a new York instances collection, called ‘neglected,’ about individuals whose deaths were up to now now not suggested through the newspaper. … A series in line with ‘The Fifth possibility: Undoing Democracy,’ a publication via Michael Lewis. … ‘Crip Camp,’ a documentary film in regards to the origins of the incapacity rights flow. ... ‘listen to Your greens & devour Your parents,’ a half-hour collection for preschoolers.” NYT MEDIAWATCH -- MSNBC this morning is launching a brand new usual podcast, “The Oath with Chuck Rosenberg.” the primary visitors will include James Comey, Preet Bharara, Andrew McCabe, Lisa Monaco and greater. -- nowadays is the one-12 months anniversary of former performing CIA Director Michael Morell’s podcast “Intelligence concerns.” He has Secretary of State Mike Pompeo on as his particular guest in the newest episode. -- MSNBC’s Rachel Maddow interviews Hillary Clinton tonight live in studio. -- Per Morning Media: “Slate’s hit podcast ‘gradual Burn’ is returning later this 12 months with a brand new host, body of workers writer Joel Anderson, and plans to cowl the murders of rappers Tupac Shakur and the infamous B.I.G. ... -- “Ashley Feinberg, a senior reporter at HuffPost, introduced she’s leaving the web site.” PLAYBOOKERS noticed: Liev Schreiber at Harry’s downtown Tuesday night ... at a going-away party for Celeste Drake, AFL-CIO change and globalization policy specialist on the Democratic membership: Reps. Rosa DeLauro (D-Conn.) and Lloyd Doggett (D-Texas) and AFL-CIO President Richard Trumka. OUT AND ABOUT -- The Atlantic Council held its 2019 individual leadership Awards at the Ritz-Carlton on Tuesday nighttime. The experience honored NATO, whose award changed into received by means of Rose Gottemoeller from retired Gen. Jim Jones; Adrienne Arsht, whose award turned into offered through Alonzo Mourning; Christine Lagarde, whose award become presented by means of Ivanka Trump; and Fred Smith, whose award changed into offered by Sen. Lamar Alexander (R-Tenn.). also noticed: Wolf Blitzer, Bret and Amy Baier, Colin and Alma Powell, Marillyn Hewson, Dina Powell and David McCormick, John F.W. Rogers (the incoming chairman of the board), Anthony Scaramucci, Steve Clemons, Niki Christoff, Mitch Landrieu, John Waldron, Nicole and Dave Nason, Miami-Dade Mayor Carlos Gimenez and wife Lourdes, Sharon Rockefeller,Julie and Wynn Radford, Fred Kempe, Josh and Ali Rogin, Morgan Ortagus and Jonathan Weinberger, Stuart and Gwen break, Franco Nuschese, Anders Fogh Rasmussen, Wesley Clark, Anita McBride, Capricia Marshall, Sam Vinograd and many ambassadors. WHITE house DEPARTURE LOUNGE -- FIRST IN PLAYBOOK: Ryan Canfield, particular assistant to the president for legislative affairs and a Hal Rogers alum, is becoming a member of GuidePost techniques as a most important. ... Thea McDonald has left the White apartment, where she turned into director of comms for the countrywide space Council. She is heading returned to Georgetown law within the fall for her ultimate 12 months of law college. TRANSITIONS -- Eric Schmidt, the former CEO of Google and the chairman emeritus of the brand new the usa basis, is leaving Alphabet’s board of administrators after 18 years. … Former Rep. Erik Paulsen (R-Minn.) is joining the pass USMCA Coalition as an honorary co-chairman. … Mercury is starting a new San Francisco office, which should be led by Jen Wlach, who has been promoted to managing director. WELCOME TO the world -- Blake Harris, COS for Tennessee Gov. bill Lee, and Holly Harris, a dietician, welcomed Peter Mitchell Harris, their third baby. Pic (hat tip: Daniel Strauss) BIRTHWEEK (was the day past): veteran Democratic campaign supervisor Max Glass, who celebrated with chums at St. Anselm (hat tip: Daniel Strauss) BIRTHDAY OF THE DAY: Molly Levinson, CEO of the Levinson neighborhood. What she’s been analyzing these days: “I recommended ‘To The conclusion of the Land,’ via David Grossman, to one in all my optimal friends and then ended up getting inspired to read it once again myself. It’s desirable and considered one of my favorites.” Playbook Plus Q&A BIRTHDAYS: Leonard Downie Jr. is 77 ... Ninio Fetalvo, director of strategic comms at CMS (h/ts Natalie Strom and Kelly Love) ... David Winston ... CNN alum Alex Wellen ... Tom Walsh of the DNC ... Amy Smith ... Meredith Schultz … Shivam Mallick Shah ... Michael Freedman ... Alan Kaye is 49 ... Anthony Cimino, SVP and head of government affairs on the bank coverage Institute ... Seth London, founder of ground control companions, is 34 ... Andy Mills, NYT producer and reporter (h/t Jon Haber) ... Stacie Paxton Cobos ... Rachael Dean Wilson of the Alliance for Securing Democracy (h/t Eric Wilson) ... Josh Tonsager … Shaina Goodman ... POLITICO Europe’s Emmet Livingstone ... John Bridgeland, founder and CEO of Civic ... Liz Stark ... Abby Huntsman, co-host of “The View” (h/t Rachel Adler) ... Graham Veysey, foremost of North Water companions ... Benin President Patrice Talon is sixty one ... … Maria Pica Karp, VP and general supervisor of gov’t affairs at Chevron ... Jeff Schapiro is 63 ... Jeff Wice ... POLITICO’s Rebecca Parker ... Ankit Desai (h/ts Erik Smith and Tim Burger) ... Ben Jacobs ... WSJ’s Julie Steinberg ... Kami Spicklemire ... Abe Foxman, national director emeritus of the ADL, is seventy nine … Julia Mazzone ... Megan Lowry, comms expert on the American Public health affiliation ... WaPo’s Jon Gerberg ... Caroline Chen, healthcare reporter at ProPublica ... Rep. Ed Perlmutter (D-Colo.) is sixty six ... Rep. Matt Cartwright (D-Pa.) is fifty eight … Kami Spicklemire ... crack of dawn Livingston ... Elizabeth Stanley ... Pete Jeffries is 55 ... Jessica Marie Gallo ... Arash Ghadishah ... Fox news alum Nelson Lewis is 35 ... Emily Lamont ... 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