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PRMIA Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition Sample Questions:

1. In a quadratic Taylor approximation, a function is approximated by:

A) a constant
B) a parabola
C) a straight line
D) a cubic polynomial

2. Which of the following is a false statement concerning the probability density function and the cumulative distribution function of a random variable?

A) the definite integral of the PDF from minus infinity to plus infinity is zero.
B) the definite integral of the CDF from minus infinity to plus infinity is undefined.
C) the PDF is non-negative.
D) the CDF approaches 1 as its argument approaches infinity.

3. What can be said about observations of random variables that are i.i.d. a normally distributed?

A) The estimated mean divided by the estimated variance has a t-distribution
B) The estimated mean divided by the estimated standard deviation has a Chi2-distribution
C) The estimated mean divided by the estimated standard deviation has a t-distribution
D) The estimated mean divided by the estimated variance has a Chi2-distribution

4. In a multiple linear regression, the significance of R2 can be tested using which distribution?

A) Binomial distribution
B) Normal distribution
C) Student's t distribution
D) F-distribution

5. Let a, b and c be real numbers. Which of the following statements is true?

A) The commutativity of multiplication is defined by
B) The associativity of multiplication is defined by
C) The existence of negatives is defined by
D) The distributivity of multiplication is defined by

Solutions: