PRMIA Exam 8008 Topic 1 Question 6 Discussion

Actual exam question for PRMIA's 8008 exam

Question #: 6
Topic #: 1

[All 8008 Questions]

Which of the following are valid techniques used when performing stress testing based on hypothetical test scenarios:

I,Modifying the covariance matrix by changing asset correlations

II,Specifying hypothetical shocks

III,Sensitivity analysis based on changes in selected risk factors

IV. Evaluating systemic liquidity risks

AI, II, III and IV

BII, III and IV

CI, II and III

DI and II

Show Suggested Answer

Suggested Answer: D

Each of these represent valid techniques for performing stress testing and building stress scenarios. Therefore d is the correct answer. In practice, elements of each of these techniques is used depending upon the portfolio and the exact situation.

by Mariann at May 06, 2022, 10:27 AM

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