## 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. Shortcomings of implied volatility**

**2. Inverse transform method**

**3. Sample mean**

**4. Four sampling distributions**

**5. Homoskedastic**

**6. WLS**

**7. Continuously compounded return equation**

**8. Unbiased**

**9. Persistence**

**10. Maximum likelihood method**

**11. Critical z values**

**12. Test for unbiasedness**

**13. Confidence interval (from t)**

**14. Priori (classical) probability**

**15. Type I error**

**16. POT**

**17. Continuous representation of the GBM**

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

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

**20. Adjusted R^2**

**21. Direction of OVB**

**22. Kurtosis**

**23. Perfect multicollinearity**

**24. Single variable (univariate) probability**

**25. Bernouli Distribution**

**26. Variance - covariance approach for VaR of a portfolio**

**27. Variance of X+Y**

**28. Variance of X+Y assuming dependence**

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

**30. EWMA**

**31. Type II Error**

**32. Multivariate probability**

**33. Poisson Distribution**

**34. R^2**

**35. Skewness**

**36. Consistent**

**37. Importance sampling technique**

**38. Unconditional vs conditional distributions**

**39. Discrete representation of the GBM**

**40. Normal distribution**

**41. Key properties of linear regression**

**42. Joint probability functions**

**43. Unstable return distribution**

**44. P - value**

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

**46. Sample correlation**

**47. Control variates technique**

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

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

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