## Test your basic knowledge |

# FRM Foundations Of Risk Management Quantitative Methods

**Instructions:**

- Answer 50 questions in 15 minutes.
- If you are not ready to take this test, you can study here.
- Match each statement with the correct term.
- Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

**1. Mean reversion in variance**

**2. Variance of X - Y assuming dependence**

**3. GPD**

**4. Maximum likelihood method**

**5. Sample covariance**

**6. Sample variance**

**7. Variance of weighted scheme**

**8. Hybrid method for conditional volatility**

**9. LFHS**

**10. Adjusted R^2**

**11. Extending the HS approach for computing value of a portfolio**

**12. Covariance**

**13. K - th moment**

**14. Significance =1**

**15. Cholesky factorization (decomposition)**

**16. Critical z values**

**17. Unbiased**

**18. Variance of X+b**

**19. Exact significance level**

**20. Hazard rate of exponentially distributed random variable**

**21. Square root rule**

**22. Variance(discrete)**

**23. Overall F - statistic**

**24. Continuously compounded return equation**

**25. Standard error for Monte Carlo replications**

**26. Kurtosis**

**27. Extreme Value Theory**

**28. Two ways to calculate historical volatility**

**29. Statistical (or empirical) model**

**30. Key properties of linear regression**

**31. BLUE**

**32. Sample correlation**

**33. Central Limit Theorem(CLT)**

**34. Sample mean**

**35. i.i.d.**

**36. Econometrics**

**37. Historical std dev**

**38. Simplified standard (un - weighted) variance**

**39. Variance of sampling distribution of means when n<N**

**40. WLS**

**41. What does the OLS minimize?**

**42. Multivariate Density Estimation (MDE)**

**43. Two drawbacks of moving average series**

**44. Importance sampling technique**

**45. Conditional probability functions**

**46. Non - parametric vs parametric calculation of VaR**

**47. Mean reversion**

**48. Difference between population and sample variance**

**49. Variance of aX + bY**

**50. Standard error**