## 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. Historical std dev**

**2. Cholesky factorization (decomposition)**

**3. R^2**

**4. Shortcomings of implied volatility**

**5. Test for unbiasedness**

**6. Sample covariance**

**7. Marginal unconditional probability function**

**8. Chi - squared distribution**

**9. Law of Large Numbers**

**10. Maximum likelihood method**

**11. Bernouli Distribution**

**12. Deterministic Simulation**

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

**14. Extreme Value Theory**

**15. Discrete random variable**

**16. P - value**

**17. Lognormal**

**18. Implied standard deviation for options**

**19. Importance sampling technique**

**20. Control variates technique**

**21. Empirical frequency**

**22. Stochastic error term**

**23. Persistence**

**24. Gamma distribution**

**25. Binomial distribution equations for mean variance and std dev**

**26. Sample variance**

**27. Direction of OVB**

**28. Cross - sectional**

**29. Mean reversion in variance**

**30. Expected future variance rate (t periods forward)**

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

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

**33. Least squares estimator(m)**

**34. Significance =1**

**35. Antithetic variable technique**

**36. POT**

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

**38. GPD**

**39. Normal distribution**

**40. Variance of aX**

**41. Mean reversion in asset dynamics**

**42. Critical z values**

**43. Regime - switching volatility model**

**44. Covariance calculations using weight sums (lambda)**

**45. Limitations of R^2 (what an increase doesn't necessarily imply)**

**46. Hybrid method for conditional volatility**

**47. Binomial distribution**

**48. Homoskedastic only F - stat**

**49. Variance of weighted scheme**

**50. GARCH**