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8007 – Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition

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Showing 7–9 of 10 questions

Question 7

Which of the following statements concerning class intervals used for grouping of data is correct?

When grouping data, attention must be paid to the following with regards to class intervals:

1. Class intervals should not overlap

2. Class intervals should be of equal size unless there is a specific need to highlight datawithin a specific subgroup

3. The class intervals should be large enough so that they not obscure interesting variationwithin the group

Select an option, then click Submit answer.

  • ○

    Statements 2 and 3 are correct

  • ○

    Statements 1 and 2 are correct

  • ○

    All three statements are correct

  • ○

    Statements 1 and 3 are correct


Question 8

An operational risk analyst models the occurrence of computer failures as a Poisson process with an arrival rate of 2 events per year. According to this model, what is the probability of zero failures in one year?

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  • ○

    0.02

  • ○

    0.14

  • ○

    0.25

  • ○

    0.50


Question 9

You work for a brokerage firm that charges its client x per share. The volume of trade of a client of type A depends on the per share commission in the following manner. If the commission is x, the client of type A will trade e-ax shares on average each week. What is the optimal commission x that maximizes the income from client A, noting that a is greater than zero?

Select an option, then click Submit answer.

  • ○

    1

  • ○

    a

  • ○

    42

  • ○

    a2