PRMIA Exam 8010 Topic 1 Question 43 Discussion

Actual exam question for PRMIA's 8010 exam

Question #: 43
Topic #: 1

[All 8010 Questions]

Which of the following are valid approaches for extreme value analysis given a dataset:

1. The Block Maxima approach

2. Least squares approach

3. Maximum likelihood approach

4. Peak-over-thresholds approach

A2 and 3

B1, 3 and 4

C1 and 4

DAll of the above

Show Suggested Answer

Suggested Answer: C

For EVT, we use the block maxima or the peaks-over-threshold methods. These provide us the data points that can be fitted to a GEV distribution.

Least squares and maximum likelihood are methods that are used for curve fitting, and they have a variety of applications across risk management.

by Britt at Mar 20, 2024, 09:09 AM

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Eileen

5 months ago

I remember studying that the block maxima approach is also a valid method.

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Laine

5 months ago

I would go with option B, which includes 1, 3 and 4.

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Cherelle

5 months ago

I believe the maximum likelihood approach is commonly used in extreme value analysis.

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Gwenn

5 months ago

I agree, but I'm not sure about the least squares approach.

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Jaclyn

6 months ago

I think all of them are valid approaches for extreme value analysis.

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Micah

6 months ago

I would have chosen D) All of the above. It seems like each approach could have its own benefits depending on the dataset.

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Augustine

6 months ago

Actually, the correct answer is A) 2 and 3. The Least squares and Maximum likelihood approaches are valid for extreme value analysis.

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Nidia

6 months ago

I'm not sure. I think it might be just the Block Maxima and Peak-over-thresholds approaches.

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Augustine

7 months ago

I think the valid approaches for extreme value analysis are the Block Maxima, Least squares, Maximum likelihood, and Peak-over-thresholds.

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