PRMIA Related Exams
8010 Exam

Pick underlying risk factors for a position in an equity index option:
I. Spot value for the index
II. Risk free interest rate
III. Volatility of the underlying
IV. Strike price for the option
If the marginal probabilities of default for a corporate bond for years 1, 2 and 3 are 2%, 3% and 4% respectively, what is the cumulative probability of default at the end of year 3?
If X represents a matrix with ratings transition probabilities for one year, the transition probabilities for 3 years are given by the matrix: