PRIMA 8006 PRM Certification – Exam I: Finance Theory, Financial Instruments, Financial Markets – 2015 Edition Online Training
PRIMA 8006 Online Training
The questions for 8006 were last updated at Apr 23,2025.
- Exam Code: 8006
- Exam Name: PRM Certification - Exam I: Finance Theory, Financial Instruments, Financial Markets – 2015 Edition
- Certification Provider: PRIMA
- Latest update: Apr 23,2025
What is the duration of a 10 year zero coupon bond. Assume the bond is callable (ie, the issuer can buy it back) at face value at any time during its existence.
- A . 0 years
- B . 5 years
- C . 1 year
- D . 10 years
The forward price of a physical asset is affected by:
- A . the spot price, the risk-free rate, carrying costs, any other cash flows from holding the asset and the volatility of spot prices
- B . the spot price, the risk-free rate, carrying costs, any other cash flows from holding the asset and the time to maturity of the forward contract
- C . the spot price, the risk-free rate, carrying costs and any other cash flows from holding the asset
- D . The spot price of the asset and the market’s prevailing view of the commodity’s direction in the future
If the implied volatility for a call option is 30%, the implied volatility for the corresponding put option is:
- A . -70%
- B . 30%
- C . -30%
- D . 70%
Which of the following statements are true:
I. A deep in-the-money call option has a value very close to that of a forward contract with a forward price equal to the exercise price
II. If the volatility of a stock goes down to zero, the value of a call option on the stock will tend to be close to that of a forward contract so long as the option is in the money.
III. All other things remaining the same, the issue of stock warrants exercisable at a future date will cause a decline in the current stock price
IV. Implied volatilities are calculated from market prices of options and are forward looking
- A . I and IV
- B . II and III
- C . III and IV
- D . All of the above
Which of the following statements are true:
I. A deep in-the-money call option has a value very close to that of a forward contract with a forward price equal to the exercise price
II. If the volatility of a stock goes down to zero, the value of a call option on the stock will tend to be close to that of a forward contract so long as the option is in the money.
III. All other things remaining the same, the issue of stock warrants exercisable at a future date will cause a decline in the current stock price
IV. Implied volatilities are calculated from market prices of options and are forward looking
- A . I and IV
- B . II and III
- C . III and IV
- D . All of the above
Which of the following statements are true:
- A . Selling a call + Selling a put = Buying the stock + Bank deposit
- B . Buying a call + Bank Deposit = Buying the stock + Selling a put
- C . Buying a call + Selling a put = Buying the stock + Bank deposit
- D . Buying a call + Bank Deposit = Buying the stock + Buying a put
Futures initial margin requirements are
- A . determined based on the client’s credit history
- B . determined by the members based on the SPAN framework
- C . determined based on the length of the settlement period
- D . determined by the exchange
The relationship between covariance and correlation for two assets x and y is expressed by which of the following equations (where covarx,y is the covariance between x and y , x and y are the respective standard deviations and x,y is the correlation between x and y ):
A)
B)
C)
D)
None of the above
- A . Option A
- B . Option B
- C . Option C
- D . Option D
Which of the following are valid credit enhancements used for credit derivatives:
I. Overcollateralization
II. Excess spread
III. Cash reserves
IV. Margin requirements
- A . I, II and IV
- B . II, III and IV
- C . I, II and III
- D . I, II, III and IV
The gamma of a call option is 0.08.
What is the gamma of the corresponding put option?
- A . -0.08
- B . 0.92
- C . 0.08
- D . -0.92
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