Free PRMIA 8013 Exam Questions

A bank sells an interest rate swap to its client, with the client agreeing to pay the bank a fixed 4% and receive 3 month LIBOR + 100 basis points, payments due every quarter. After quarter 1, the 3 month LIBOR is 2% pa. Which of the following payments will happen in respect of this swap, assuming the contract notional is $100m, and the rate convention is 30/360. 

Which of the following statements is true:I. The standard deviation of a short position is the same as the standard deviation of a long positionII. The expected return of a short position is the same as that a long position in the same assetIII. If two assets are perfectly positively correlated, then a short position in one and a long position in theother are negatively correlated IV. If we increase the weight of an asset in a portfolio, its correlation with other assets in the portfolio scales up proportionately

What is the standard deviation (in dollars) of a portfolio worth $10,000, of which $4,000 is invested in Stock A, with an expected return of 10% and standard deviation of 20%; and the rest in Stock B, with an expected return of 12% and a standard deviation of 25%. The correlation between the two stocks is 0.6.

What is the price of a treasury bill with $100 face maturing in 90 days and yielding 5%? 

What is the price of a treasury bill with $100 face maturing in 90 days and yielding 5%?