PRMIA Exam 8010 Topic 2 Question 68 Discussion

Actual exam question for PRMIA's 8010 exam

Question #: 68
Topic #: 2

[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 Felice at Mar 09, 2025, 02:13 PM

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Lauran

7 days ago

Maximum likelihood is a standard technique for parameter estimation, so I'd expect it to be a valid approach for extreme value analysis. The question seems to be testing our knowledge of different statistical methods.

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Nikita

12 days ago

I think the correct answer is D) All of the above because all the approaches mentioned can be used for extreme value analysis.

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Timothy

19 days ago

The Block Maxima approach and the Peak-over-thresholds approach seem to be the most relevant for extreme value analysis. I'm not sure why the Least squares approach would be considered valid here.

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