PRMIA Exam 8010 Topic 8 Question 65 Discussion

Actual exam question for PRMIA's 8010 exam

Question #: 65
Topic #: 8

[All 8010 Questions]

Which of the following credit risk models relies upon the analysis of credit rating migrations to assess credit risk?

AKMV's EDF based approach

BThe CreditMetrics approach

CThe actuarial approach

DThe contingent claims approach

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 Mireya at Jan 09, 2025, 05:49 PM

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Catalina

27 days ago

The contingent claims approach? More like the 'contingent on me passing this exam' approach!

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Lashon

2 days ago

C) The actuarial approach

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Kirk

12 days ago

B) The CreditMetrics approach

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Mickie

15 days ago

A) KMV's EDF based approach

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Luisa

1 months ago

KMV's EDF based approach? That's like the Michael Keaton of credit risk models - good, but not the best.

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Bo

15 days ago

A) KMV's EDF based approach

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Cristy

1 months ago

The actuarial approach? Sounds like something my grandpa would use. This is the 21st century, folks!

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Demetra

6 days ago

User 1: I think the actuarial approach is outdated.

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Romana

19 days ago

B) The CreditMetrics approach

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Alpha

25 days ago

A) KMV's EDF based approach

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Hortencia

2 months ago

Oh man, I was totally confused between the CreditMetrics and the contingent claims approach. Gotta study up on those credit risk models!

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Bobbye

2 months ago

I'm not sure, but I think CreditMetrics approach also considers credit rating migrations.

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Colby

2 months ago

I agree with Mica, KMV's EDF based approach analyzes credit rating migrations.

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Benedict

2 months ago

The CreditMetrics approach sounds like the right answer here. It's all about analyzing credit rating migrations to assess credit risk.

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Ahmed

15 days ago

The contingent claims approach is more focused on option pricing rather than credit rating migrations.

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Estrella

17 days ago

The actuarial approach may not rely heavily on credit rating migrations.

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Marisha

19 days ago

I think KMV's EDF based approach also considers credit rating migrations.

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Ashton

1 months ago

I agree, the CreditMetrics approach is focused on credit rating migrations.

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Mica

2 months ago

I think the answer is A) KMV's EDF based approach.

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