Exam 8008 Topic 1 Question 304 Discussion

Actual exam question for PRMIA's 8008 exam
Question #: 304
Topic #: 1
Random recovery rates in respect of credit risk can be modeled using:

Suggested Answer: A Vote an answer

Explanation
The beta distribution is commonly used to model recovery rates. It is a distribution for variables whose values lie between 0 & 1, and the parameters of the distribution can be estimated using the mean and standard deviation of the data. Therefore Choice 'a' is correct and the others are wrong.
Refer to the tutorial on distributions for an Excel model of the beta distribution.

by Alexander at Aug 28, 2026, 01:33 PM

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