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FRM Foundations Of Risk Management Quantitative Methods

  • Answer 50 questions in 15 minutes.
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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. Deterministic Simulation

2. Sample variance


4. Chi - squared distribution

5. P - value

6. Efficiency

7. Continuously compounded return equation

8. Mean(expected value)

9. Standard normal distribution

10. Mean reversion

11. SER

12. Exponential distribution

13. Joint probability functions

14. Exact significance level

15. Multivariate Density Estimation (MDE)

16. Variance of X+Y

17. Hybrid method for conditional volatility

18. Economical(elegant)

19. GEV

20. Heteroskedastic

21. Standard variable for non - normal distributions

22. Hazard rate of exponentially distributed random variable

23. Persistence

24. Logistic distribution

25. Homoskedastic

26. Multivariate probability

27. Variance - covariance approach for VaR of a portfolio

28. Shortcomings of implied volatility

29. Critical z values

30. F distribution

31. Biggest (and only real) drawback of GARCH mode

32. Square root rule

33. Historical std dev

34. Extending the HS approach for computing value of a portfolio

35. Bootstrap method

36. T distribution

37. Binomial distribution

38. Two requirements of OVB

39. Direction of OVB

40. Marginal unconditional probability function

41. Continuous random variable

42. Antithetic variable technique

43. POT

44. Variance of weighted scheme

45. Cholesky factorization (decomposition)

46. Difference between population and sample variance

47. Potential reasons for fat tails in return distributions

48. Kurtosis

49. Implied standard deviation for options

50. What does the OLS minimize?