PRMIA Exam 8010 Topic 2 Question 68 Discussion

Actual exam question for PRMIA's 8010 exam

Question #: 68
Topic #: 2

[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

A2 and 3

B1, 3 and 4

C1 and 4

DAll of the above

Show Suggested 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 Felice at Mar 09, 2025, 02:13 PM

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Francene

2 months ago

The Peak-over-thresholds approach sounds like the most extreme way to analyze extreme values. I'm just picturing someone standing on a cliff, yelling 'PEAK!' every time a data point exceeds the threshold.

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Helaine

18 days ago

User 4: I agree, using a combination of different approaches can give a more comprehensive analysis.

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Delpha

21 days ago

User 3: I prefer the Maximum likelihood approach for a more statistical approach.

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Clarence

28 days ago

User 2: Yeah, it does sound intense. But it's one of the valid approaches for extreme value analysis.

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Albert

1 months ago

User 1: I think the Peak-over-thresholds approach is a bit dramatic.

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Jonell

2 months ago

I can't believe they're including the Least squares approach as an option. That's like using a hammer to perform open-heart surgery!

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Stevie

2 months ago

All of the approaches listed seem like they could be valid for extreme value analysis. This question is really testing our understanding of the different techniques, not just memorization.

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Eulah

1 months ago

User 3: I think all of the approaches listed could be valid for extreme value analysis.

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Lashanda

1 months ago

User 2: I believe it's actually 2 and 3 that are valid.

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Staci

2 months ago

User 1: I think the valid approaches for extreme value analysis are 1, 3, and 4.

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Lauran

3 months ago

Maximum likelihood is a standard technique for parameter estimation, so I'd expect it to be a valid approach for extreme value analysis. The question seems to be testing our knowledge of different statistical methods.

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Shalon

1 months ago

B) 1, 3 and 4

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Rikki

1 months ago

Maximum likelihood is commonly used for parameter estimation in extreme value analysis.

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Willodean

2 months ago

A) 2 and 3

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Nikita

3 months ago

I think the correct answer is D) All of the above because all the approaches mentioned can be used for extreme value analysis.

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Timothy

3 months ago

The Block Maxima approach and the Peak-over-thresholds approach seem to be the most relevant for extreme value analysis. I'm not sure why the Least squares approach would be considered valid here.

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