Financial Risk Modelling - practice questions

The inputs that you cannot control in a quantitative risk model is known as

Which of the following Value at Risk method used Monte Carlo Simulation?

The types of statistics that we can use to summarise the range of outcomes from our risk model include:

What does the implied volatility of an option indicate?

A mathematical model, helps us to simulate what would happen in the real world, and perform many experiments to learn ho

Values that don’t go below zero but have unlimited positive potential can be represented by?

The price of an options’ contract is typically higher when the implied volatility is lower

The type of analysis that helps to identify the uncertain inputs with the biggest impact on our key outcomes is known as

The systematic study of uncertainties and risks we encounter in business and financial markets is referred to as,

Which of the followings is not a main use of regression analysis?

Which of the followings is a benefit of horizontal (or trend) analysis?

A distribution in which all values have an equal chance of occurring is known as?

Which of the followings is not a diversification strategy to mitigate risk outside management control?

Risk is specific to a person or company - it is not the same for all observers.

Tool that is used to address risk faced by banks due to mismatch between assets & liabilities, known as:

Which of the following circumstances the univariate time series models are used?

Which of the following distributions the majority of price activity follows?

What is the shape of a yield curve in a normal interest rate environment?

What does the retained earnings to total assets ratio in the  linear discriminant model measures?

For a 2-tail test, compute likely closing price at 95% CI, Mean=£45, SD=£5; > or < mean price

The models in the form of equation, function or polynomial of only one variable is called:

A statistical measure of the dispersion of returns for a given security or Market Index is referred to as?

Values in a log-normal distribution are-

Which is not an outcome that a risk analyst examines?

An intrinsic feature of some part of nature which is the same for all observers is referred to as?

Which of the followings of a risk analysis model requires the risk analyst to think in?

A decision variable is a quantity that the decision-maker cannot control.

What method is used to understand the impact on the outcome when there are different sources of uncertainties?

What does the working capital to total assets ratio in the Z-score linear discriminant model measures?

Negatively sloped yield curve often generates

Analysis that finds combinations of input values most responsible for outputs achieving specified target values is

Statistic that measures & quantifies financial risk of a firm, portfolio or position over a specified time is known as:

The methods that can be used to deal with Residual risk exposure include:

What are the three sets of arguments used in Triangular distribution?

Which of the followings is a condition of symmetrical distribution?

Changes in the relationship between short and long-term interest rates is known as:

Which part of the DuPont decomposition reflects the income statement?

A mathematical model where outcomes are precisely determined through known relationship among states & event is known as

Which of the followings is not a condition of triangular distribution?

Why are deterministic risk models not optimal for risk analysis?

Which of the following is the correct measure of equity multiplier?

The metric that tracks the performance of a group of stocks or financial security is known as?

Risk analysis identifies the range of possible outcomes you can expect for output variables and their probabilities of o

The height of a probability distribution curve represent:

The following except ONE is Not a rational cause of volatility

The following except ONE is NOT a core element of Quantitative risk analysis:

What are the ways that changes in interest rates affect a bank’s profitability

Which of the followings does not require the application of the time series analysis?

The portion of the balance sheet affected by interest risk is.

Which of the followings is not relevant when looking at a time series?

Which of the followings is an example of Altman's Z-score prediction model?

Which of the followings the time series can explain?

A projection of what the rate of change of a given security is expected to be in the future is referred to as?

A zero GAP, protects a bank against both increases and decreases in interest rates.

Why are events with low probability of occurrence that may result in high losses difficult to quantify?

What does higher statistical volatility indicate?

Which of the following is not considered as a moment of probability distribution?

A distribution in which extreme events have been averaged out is known as?

Systematic use of information to determine how often events may occur & magnitude of their consequences is referred as:

Which of the followings is excluded in Porter's Five Forces?

The two sets of parameters used in a normal distribution to specify a range of possible values & their probabilities:

Financial metric that measures how likely the returns on security will change with the changes in the market return, is:

Changes in the relationship between short and long-term interest rates is known as:

Which of the following includes the process of risk analysis?

Why do banks do better with an upward-sloping yield curve than downward-sloping yield curve?

In a regression model the ratio between the change on the vertical axis over the chance on horizontal axis represent:

Which of the following is not a sign of a firm's financial weakness?

Which of the followings is not a part of financial analysis technique?

Which of the following is not a primary component of Return of Equity?