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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

Show Suggested Answer Hide 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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Thora
2 days 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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Carrol
12 days 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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Shawn
17 hours ago
I think you're onto something with option D. The maximum likelihood approach could be the key here.
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Verda
15 days 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
21 days 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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Billy
19 hours ago
I think the Block Maxima approach and Peak-over-thresholds approach are the way to go.
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Carmen
27 days ago
I believe it's actually the Maximum likelihood approach that is also valid for extreme value analysis.
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Eveline
28 days 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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