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Updated: Jul 22, 2026

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PRMIA 8007 Exam Overview:

Certification Vendor:PRMIA (Professional Risk Managers' International Association)
Exam Name:Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition
Exam Number:8007
Certificate Validity Period:3 years from passing; must complete all PRM exams within 2 years
Related Certifications:PRMâ„¢ Certification
ORM (Operational Risk Manager)
Available Languages:English
Exam Price:$650 - $800 USD (varies by PRMIA membership type)
Passing Score:60%
Real Exam Qty:132
Exam Duration:120 minutes
Exam Format:Multiple-choice questions, Computer-based, No negative marking
Recommended Training:PRMIA Official Handbook & Study Materials
PRMIA Recommended Preparation Resources
Exam Registration:PRMIA Official Registration
Pearson VUE Scheduling
Sample Questions:PRMIA 8007 Sample Questions
Exam Way:Online proctored or onsite at Pearson VUE testing centers
Pre Condition:PRMIA membership; bachelor's degree + 2 years experience OR 4 years experience without degree; graduate degree or relevant professional designation may waive experience requirement
Official Syllabus URL:https://prmia.org/Public/PRM/PRM_Handbook_Digital%20Resources.aspx

PRMIA 8007 Exam Syllabus Topics:

SectionWeightObjectives
Linear Algebra and Matrix Theory20%- Matrix operations
  • 1. Determinants and trace
    • 2. Addition, multiplication, inversion
      - Vectors and eigenvalues
      • 1. Diagonalization
        • 2. Eigenvalues and eigenvectors
          Statistics and Regression Analysis20%- Linear regression
          • 1. Simple and multiple regression
            • 2. Hypothesis testing and confidence intervals
              - Descriptive statistics
              • 1. Measures of location and dispersion
                • 2. Correlation and covariance
                  Calculus and Functions20%- Single-variable calculus
                  • 1. Integrals and applications
                    • 2. Derivatives and applications
                      • 3. Limits and continuity
                        - Multivariable calculus
                        • 1. Optimization
                          • 2. Partial derivatives
                            Numerical Methods & Financial Mathematics15%- Basics of risk modeling
                            - Root finding and approximation
                            - Time value of money
                            Probability Theory25%- Basic probability concepts
                            • 1. Conditional probability and independence
                              • 2. Axioms and rules
                                - Random variables and distributions
                                • 1. Expected value, variance, covariance
                                  • 2. Discrete and continuous distributions

                                    PRMIA Exam II: Mathematical Foundations of Risk Measurement - 2015 Edition Sample Questions:

                                    1. The quarterly compounded rate of return is 6% per annum. What is the corresponding effective annual return?

                                    A) 6%
                                    B) None of the above
                                    C) 1.50%
                                    D) 6.14%


                                    2. You want to test the hypothesis that a population parameter of a regression model is zero. Your alternative hypothesis is that 0. Denote by SD() the estimated standard deviation of , and by MEAN() the estimated mean of . Which test statistic is appropriate, and what is its distribution?

                                    A) test statistic = MEAN()/SD(), normal distribution
                                    B) test statistic = SD()/MEAN(), normal distribution
                                    C) test statistic = SD()/MEAN(), t distribution
                                    D) test statistic = MEAN()/SD(), t distribution


                                    3. I have $5m to invest in two stocks: 75% of my capital is invested in stock 1 which has price 100 and the rest is invested in stock 2, which has price 125. If the price of stock 1 falls to 90 and the price of stock 2 rises to 150, what is the return on my portfolio?

                                    A) -2.50%
                                    B) 5%
                                    C) -5%
                                    D) 2.50%


                                    4. When the errors in a linear regression show signs of positive autocorrelation, which of the statements below is true?

                                    A) The regression coefficient will be too high and the standard error of the regression coefficient will be understated
                                    B) The regression coefficient will be unbiased, but the standard error of the regression coefficient will be understated
                                    C) The regression coefficient will be unbiased, but the standard error of the regression coefficient will be overstated
                                    D) The regression coefficient will be too low and the standard error of the regression coefficient will be overstated


                                    5. An asset price S is lognormally distributed if:

                                    A) 1/S is normally distributed
                                    B) ln(dS/S) is normally distributed
                                    C) ln(1+dS/S) is normally distributed
                                    D) the change in price (dS) is normally distributed


                                    Solutions:

                                    Question # 1
                                    Answer: D
                                    Question # 2
                                    Answer: D
                                    Question # 3
                                    Answer: A
                                    Question # 4
                                    Answer: C
                                    Question # 5
                                    Answer: C

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