[Aug-2021] Pass 8007 Exam in First Attempt Updated8007 DumpsKing Exam Question
PRM Dumps 8007 Exam for Full Questions - Exam Study Guide
NEW QUESTION 54
Over four consecutive years fund X returns 1%, 5%, -3%, 8%. What is the average growth rate of fund X over this period?
- A. 2.75%
- B. None of the above
- C. 2.67%
- D. 2.49%
Answer: C
NEW QUESTION 55
When a number is written with a fraction as an exponent, such as , which of the following is the correct computation?
- A. Multiply 75 by 2.5
- B. Take the square-root of 75 and raise it to the 5th power
- C. Square 75, then take the fifth root of it
- D. Divide 75 by 2, then raise it to the 5th power
Answer: B
NEW QUESTION 56
Bond convexity is closely related to ...
- A. The second derivative of the bond's present value with respect to yield
- B. The integral of the bond's present value with respect to yield
- C. The sensitivity of the bond's present value with respect to yield
- D. The derivative of the bond's present value with respect to yield
Answer: A
NEW QUESTION 57
The fundamental theorem of analysis establishes a relation between
- A. The derivative of a function and the derivative of its inverse function
- B. First and second derivative of a function
- C. Integration and differentiation of functions
- D. The derivative of a function and the slope of its graph
Answer: C
NEW QUESTION 58
Let N(.) denote the cumulative distribution function of the standard normal probability distribution, and N' its derivative. Which of the following is false?
- A. N'(0) 0
- B. N(0) = 0.5
- C. N'(x) 0 as x
- D. N(x) 0 as x
Answer: D
NEW QUESTION 59
What can be said about observations of random variables that are i.i.d. a normally distributed?
- A. The estimated mean divided by the estimated variance has a Chi2-distribution
- B. The estimated mean divided by the estimated standard deviation has a Chi2-distribution
- C. The estimated mean divided by the estimated variance has a t-distribution
- D. The estimated mean divided by the estimated standard deviation has a t-distribution
Answer: D
NEW QUESTION 60
What is the 40th term in the following series: 4, 14, 30, 52, ...?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: C
NEW QUESTION 61
A 2-year bond has a yield of 5% and an annual coupon of 5%. What is the Macaulay Duration of the bond?
- A. 1.86
- B. 0
- C. 1.75
- D. 1.95
Answer: D
NEW QUESTION 62
Which of the following statements is true?
- A. The constant plays an important role in the mathematical description of continuous compounding.
- 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. Continuous compounding can be thought as making the compounding period infinitesimally small.
Answer: D
NEW QUESTION 63
When calculating the implied volatility from an option price we use the bisection method and know initially that the volatility is somewhere between 1% and 100%. How many iterations do we need in order to determine the implied volatility with accuracy of 0.1%?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: B
NEW QUESTION 64
Exploring a regression model for values of the independent variable that have not been observed is most accurately described as...
- A. Hypothesis testing
- B. Prediction
- C. Estimation
- D. Regression
Answer: B
NEW QUESTION 65
On average, one trade fails every 10 days. What is the probability that no trade will fail tomorrow?
- A. 0.095
- B. 0.100
- C. 0.905
- D. 0.95
Answer: C
NEW QUESTION 66
The correlation between two asset returns is 1. What is the smallest eigenvalue of their correlation matrix?
- A. 0
- B. 0.5
- C. 1
- D. None of the above
Answer: A
NEW QUESTION 67
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. -5%
- B. -2.50%
- C. 5%
- D. 2.50%
Answer: B
NEW QUESTION 68
Let E(X ) = 1, E(Y ) = 3, Corr(X, Y ) = -0.2, E(X2 ) = 10 and E(Y2 ) = 13. Find the covariance between X and Y
- A. -1.2
- B. -2.8
- C. None of the above
- D. 1.3
Answer: A
NEW QUESTION 69
At what point x does the function f(x) = x3 - 4x2 + 1 have a local minimum?
- A. -0.666666667
- B. 0
- C. 2.66667
- D. 1
Answer: C
NEW QUESTION 70
If a random variable X has a normal distribution with mean zero and variance 4, approximately what proportion of realizations of X should lie between -4 and +4?
- A. 66.60%
- B. 99%
- C. 90%
- D. 95%
Answer: D
NEW QUESTION 71
Consider two securities X and Y with the following 5 annual returns:
X: +10%, +3%, -2%, +3%, +5%
Y: +7%, -2%, +3%, -5%, +10%
In this case the sample covariance between the two time series can be calculated as:
- A. 0.40729
- B. 0.32583
- C. 0.00109
- D. 0.00087
Answer: C
NEW QUESTION 72
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