Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location PL
Mob_nav_barsMENU

PRMIA Exam 8010 Topic 5 Question 62 Discussion

Actual exam question for PRMIA's 8010 exam
Question #: 62
Topic #: 5
[All 8010 Questions]

Under the CreditPortfolio View approach to credit risk modeling, which of the following best describes the conditional transition matrix:

Show Suggested Answer Hide 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 Farrah at Oct 22, 2024, 12:23 PM

Limited Time Offer

25%

Off

Get Premium 8010 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel
Mitsue
23 days ago
Alright, time to channel my inner credit risk modeling wizard. D sounds like the way to go - gotta love those asset return distributions!
upvoted 0 times
...
Letha
25 days ago
Wait, there's a 'conditional transition matrix' now? What's next, an 'unconditional transition matrix'? These credit risk folks really know how to keep us on our toes!
upvoted 0 times
Kyoko
2 days ago
I think the conditional transition matrix is the unconditional transition matrix adjusted for the state of the economy and other macro economic factors being modeled.
upvoted 0 times
...
...
Glendora
1 months ago
D all the way! Adjusting the transition matrix for asset returns is the key to capturing the true credit risk dynamics. Anything less would be like trying to drive a car without knowing the road conditions.
upvoted 0 times
...
Melvin
1 months ago
A and C sound a bit too vague to me. I'm going to go with D. It seems like the most specific and technically accurate description of the conditional transition matrix.
upvoted 0 times
Elbert
8 days ago
User 3: D is the best choice for describing the conditional transition matrix.
upvoted 0 times
...
Ines
11 days ago
User 2: I agree, D seems more specific and accurate.
upvoted 0 times
...
Beata
18 days ago
User 1: I think A and C are too vague.
upvoted 0 times
...
...
Chu
2 months ago
Hmm, I'm not too sure about this one. I was thinking the answer might be B, but now I'm second-guessing myself. Guess I need to study my credit risk modeling a bit more.
upvoted 0 times
Heidy
1 months ago
User 2: I'm not sure, I was leaning towards B
upvoted 0 times
...
Donette
1 months ago
User 1: I think the answer is A
upvoted 0 times
...
...
Antonio
2 months ago
Hmm, that's an interesting perspective. I can see how that could also be a valid interpretation.
upvoted 0 times
...
Yuette
2 months ago
I think the correct answer is D. The conditional transition matrix is the transition matrix adjusted for the distribution of the firms' asset returns. This makes sense because credit risk is closely tied to the value of the firm's assets.
upvoted 0 times
Kristin
1 months ago
I'm not sure, but I think it might be the transition matrix adjusted for the risk horizon being different from that of the transition matrix.
upvoted 0 times
...
Jillian
1 months ago
I see your point, but I think it's actually the unconditional transition matrix adjusted for the state of the economy and other macro economic factors being modeled.
upvoted 0 times
...
Son
1 months ago
I believe the conditional transition matrix is actually the unconditional transition matrix adjusted for probabilities of defaults.
upvoted 0 times
...
Margarita
2 months ago
I think the correct answer is D. The conditional transition matrix is the transition matrix adjusted for the distribution of the firms' asset returns.
upvoted 0 times
...
...
Ruthann
2 months ago
I disagree, I believe it is adjusted for the distribution of the firms' asset returns.
upvoted 0 times
...
Antonio
2 months ago
I think the conditional transition matrix is the unconditional transition matrix adjusted for the state of the economy.
upvoted 0 times
...

Save Cancel
az-700  pass4success  az-104  200-301  200-201  cissp  350-401  350-201  350-501  350-601  350-801  350-901  az-720  az-305  pl-300  

Warning: Cannot modify header information - headers already sent by (output started at /pass.php:70) in /pass.php on line 77