PRMIA Related Exams
8006 Exam
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, σx and σy are the respective standard deviations and ρx,y is the correlation between x and y):
A)

B)

C)

D)
None of the above
[According to the PRMIA study guide for Exam 1, Simple Exotics and Convertible Bonds have been excluded from the syllabus. You may choose to ignore this question. It appears here solely because the Handbook continues to have these chapters.]
A digital cash-or-nothing option can be hedged reasonably effectively using:
A futures clearing house: