PRMIA Exam 8010 Topic 5 Question 62 Discussion

Actual exam question for PRMIA's 8010 exam

Question #: 62
Topic #: 5

[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 Farrah at Oct 22, 2024, 12:23 PM

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Anglea

4 months ago

I'm going to go with option B. The Block Maxima and Peak-over-thresholds approaches are the classic techniques, and the maximum likelihood approach is a solid backup plan. As for the least squares approach, that's like trying to use a screwdriver to hammer a nail - it just doesn't fit the job.

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Erinn

3 months ago

Yeah, it's like trying to use a screwdriver to hammer a nail - just doesn't work.

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Hoa

3 months ago

I'm not so sure about the least squares approach though, it might not be the best fit.

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Kanisha

3 months ago

I agree, those are the classic techniques for extreme value analysis.

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Torie

3 months ago

I think option B is the way to go. Block Maxima and Peak-over-thresholds are solid choices.

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Thora

4 months ago

Option C, all the way! The Block Maxima and Peak-over-thresholds approaches are the bread and butter of extreme value analysis. The other two options are just unnecessary fluff, in my opinion.

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Annamaria

3 months ago

I agree, using multiple approaches can give a more robust understanding of extreme values in a dataset.

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Chuck

3 months ago

I think a combination of all approaches would provide a comprehensive analysis of extreme values.

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Veronica

3 months ago

I see your point, but I still think the Block Maxima and Peak-over-thresholds approaches are the most important.

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Justine

3 months ago

I disagree, I think the Maximum likelihood approach is crucial for extreme value analysis.

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Carrol

5 months ago

Hmm, I'm torn between options B and D. The maximum likelihood approach is a bit of a wild card, but it could be a sneaky hidden gem in this question. I might just go for the gold and select D - all of the above.

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Germaine

4 months ago

Let's go for option D then, cover all our bases with all of the above.

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Glory

4 months ago

I agree, the maximum likelihood approach is a powerful tool for extreme value analysis.

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Shawn

4 months ago

I think you're onto something with option D. The maximum likelihood approach could be the key here.

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Verda

5 months ago

I'm going with option B. The Block Maxima and Peak-over-thresholds approaches are specifically designed for extreme value analysis, and the maximum likelihood approach is a powerful tool that can also be used in this context.

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Corazon

5 months ago

The Block Maxima approach and the Peak-over-thresholds approach seem like the most logical choices for extreme value analysis. The least squares approach is more for linear regression, and the maximum likelihood approach is a bit overkill for this task.

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Clay

4 months ago

Yeah, I think that makes sense. The least squares and maximum likelihood approaches might not be as relevant in this case.

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Lashonda

4 months ago

I think D) All of the above would cover all possible approaches for extreme value analysis.

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Rikki

4 months ago

I would choose option C) 1 and 4 as the valid approaches for extreme value analysis.

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Aleshia

4 months ago

I would go with option C) 1 and 4, since those align with the Block Maxima and Peak-over-thresholds approaches.

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Earleen

4 months ago

I agree, those two options seem like the most suitable for extreme value analysis.

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Maryrose

4 months ago

I agree, those two seem like the most suitable methods for extreme value analysis.

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Elliot

4 months ago

I think the Block Maxima approach and Peak-over-thresholds approach are the best options.

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Billy

4 months ago

I think the Block Maxima approach and Peak-over-thresholds approach are the way to go.

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Carmen

5 months ago

I believe it's actually the Maximum likelihood approach that is also valid for extreme value analysis.

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Eveline

5 months ago

I think the valid approaches for extreme value analysis are the Block Maxima approach and the Peak-over-thresholds approach.

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