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PRMIA Exam 8010 Topic 8 Question 65 Discussion

Actual exam question for PRMIA's 8010 exam
Question #: 65
Topic #: 8
[All 8010 Questions]

Which of the following credit risk models relies upon the analysis of credit rating migrations to assess credit risk?

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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 Mireya at Jan 09, 2025, 05:49 PM

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Ligia
2 months ago
Least squares? Come on, this is extreme value analysis, not a math competition. Let's keep it real!
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Carin
2 months ago
I think the correct answer is B) 1, 3 and 4 because those approaches are commonly used in extreme value analysis.
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Cheryll
2 months ago
Peak-over-thresholds? That sounds like a trick question. It's either all or nothing, baby!
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Carlee
1 months ago
I think it's all of the above then, including Peak-over-thresholds.
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Elza
2 months ago
Peak-over-thresholds approach is a valid approach for extreme value analysis.
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Vallie
2 months ago
I believe the valid approaches are the Maximum likelihood approach and the Peak-over-thresholds approach.
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Odelia
2 months ago
Maximum likelihood is definitely the way to go. It's like finding the best-fitting party hat for your head - you want the one that fits just right!
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Laquanda
3 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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Pansy
3 months ago
The Block Maxima approach makes the most sense to me. It's like going to the gym and only counting the heaviest weights you lifted - the real extremes!
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Terrilyn
2 months ago
Colene: That's a valid point, different approaches can provide different insights.
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Willodean
2 months ago
User 3: I prefer the Maximum likelihood approach, it gives a different perspective on extreme values.
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Colene
2 months ago
User 2: I agree, it's like focusing on the highest points in the dataset.
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Gertude
2 months ago
So, the valid approaches for extreme value analysis given a dataset are the Block Maxima approach and the Maximum likelihood approach.
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Lynelle
2 months ago
User 1: I think the Block Maxima approach is a good way to analyze extreme values.
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Kelvin
2 months ago
I think the Maximum likelihood approach is also valid for extreme value analysis, as it estimates the parameters of the distribution that best fits the data.
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Alyce
2 months ago
I agree, the Block Maxima approach focuses on the highest values, which can be important for extreme value analysis.
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