Practice Quiz

FRM Financial Risk Manager Practice Test - Question List

Select how would you like to study

Study Mode Free Daily Question Test Mode
6. Tom wants to sell his house, but it will take at least two months before the transaction occurs. This asset is
  1. Unattractive.
  2. Risky.
  3. Unsellable.
  4. Illiquid.
See answer
7. Britney has the following utility function:U(w)=w2. Given that the second derivative is positive, what is her attitude to risk?
  1. Risk-averse.
  2. Risk-averse at low levels of wealth and risk neutral as wealth increases.
  3. Risk-loving.
  4. Risk-averse for low levels of wealth and risk loving at higher levels of wealth.
See answer
8. Tom has the following curve that represents his utility function. What is his attitude to risk?
  1. Risk averse.
  2. Risk neutral.
  3. Risk loving.
  4. Risk seeking.
See answer
9. What is the meaning of standard deviation? Select all that apply.
  1. It measures the degree of spread. The bigger it is, the more likely to find oneself from the mean.
  2. It is the square root of the variance.
  3. It provides a crude measure of risk.
  4. All of the above.
See answer
10. Mike is a gambler. He’s been offered a fair gamble. How will he likely behave?
  1. Roll the dice, baby!
  2. He would have to further analyze the risk reward curve.
  3. No fun . . . Mike would pass.
  4. He would not gamble, because the expected value is zero.
See answer

Select how would you like to study

Study Mode Free Daily Question Test Mode