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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. Simplified standard (un - weighted) variance

2. Central Limit Theorem(CLT)

3. Confidence interval for sample mean

4. Homoskedastic

5. Cross - sectional

6. Confidence ellipse

7. Result of combination of two normal with same means

8. Shortcomings of implied volatility

9. Test for unbiasedness

10. Hybrid method for conditional volatility

11. Mean reversion in asset dynamics

12. BLUE

13. Variance of X+Y assuming dependence

14. Time series data

15. Stochastic error term

16. Two drawbacks of moving average series


18. Priori (classical) probability

19. Sample covariance

20. Antithetic variable technique

21. Mean(expected value)

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

23. Maximum likelihood method

24. Type I error

25. Binomial distribution equations for mean variance and std dev

26. Variance of sample mean

27. LAD

28. Perfect multicollinearity

29. Econometrics

30. Gamma distribution

31. Key properties of linear regression

32. Variance of weighted scheme

33. Weibul distribution

34. Efficiency

35. Multivariate Density Estimation (MDE)

36. Law of Large Numbers

37. Monte Carlo Simulations

38. POT

39. Statistical (or empirical) model

40. Implications of homoscedasticity

41. Empirical frequency

42. Normal distribution

43. Variance - covariance approach for VaR of a portfolio

44. Continuous random variable

45. Sample variance

46. ESS

47. Continuously compounded return equation

48. Sample correlation

49. T distribution

50. Deterministic Simulation