PRMIA 8002 Actual Free Exam Questions & Community Discussion

Exam Code/Number: 8002
Exam Name/Title: PRM Certification - Exam II: Mathematical Foundations of Risk Measurement
Certification Provider: PRMIA
Corresponding Certification: PRM

Exam Questions: 132
Updated On: Jun 03, 2026

Question #37

I have a portfolio of two stocks. The weights are equal. The one volatility is 30% while the other is 40%. The minimum and maximum possible values of the volatility of my portfolio are:

A. 10% and 70%

B. 10% and 40%

C. 5% and 35%

D. 30% and 40%

Discussion 0

Correct Answer: C Vote an answer

Question #38

Which of the following statements is true?

A. Continuous compounding can be thought as making the compounding period infinitesimally small.

B. Continuous compounding is the better method because it results in higher present values compared to discrete compounding.

C. Discrete and continuous compounding produce the same results if the discount rate is positive.

D. The constant plays an important role in the mathematical description of continuous compounding.

Discussion 0

Correct Answer: A Vote an answer

Question #39

A 2-year bond has a yield of 5% and an annual coupon of 5%. What is the Modified Duration of the bond?

A. 1.75

B. 2

C. 1.95

D. 1.86

Discussion 0

Correct Answer: D Vote an answer

Question #40

Identify the type and common element (that is, common ratio or common difference) of the following sequence: 6, 12, 24

A. geometric sequence, common ratio 3

B. arithmetic sequence, common difference 2

C. geometric sequence, common ratio 2

D. arithmetic sequence, common ratio 2

Discussion 0

Correct Answer: C Vote an answer

Question #41

What is the indefinite integral of the function f(x) = ln(x), where ln(x) denotes the natural logarithmic function?

A. ln(x) - x

B. 1/x

C. x ln(x) - x

D. exp(x)

Discussion 0

Correct Answer: C Vote an answer

Question #42

Calculate the determinant of the following matrix:

A. 2

B. 4

C. 4.25

D. -4.25

Discussion 0

Correct Answer: A Vote an answer

Question #43

Variance reduction is:

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

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

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

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

Discussion 0

Correct Answer: D Vote an answer

Question #44

An option has value 10 when the underlying price is 99 and value 9.5 when the underlying price is
101. Approximate the value of the option delta using a first order central finite difference.

A. -0.5

B. 0.25

C. -4

D. -0.25

Discussion 0

Correct Answer: D Vote an answer

Question #45

If the annual volatility of returns is 25% what is the variance of the quarterly returns?

A. 0.0156

B. 0.1250

C. None of the above

D. 0.0625

Discussion 0

Correct Answer: A Vote an answer

Download Free PRMIA 8002 Demo

Simply submit your e-mail address below to get started with our free demo of your PRMIA 8002 exam.