1. What is the primary purpose of using quantitative models in finance?

 A) To predict stock prices

 B) To assess risk

 C) To guarantee profits

 D) To visualize data

 Answer: B) To assess risk

 Rationale: Quantitative models are primarily used to assess and manage

risk, rather than to predict specific stock prices or guarantee profits.

2. Which of the following is a common assumption in quantitative

modeling?

 A) Markets are always efficient

 B) Risk preferences are irrelevant

 C) All variables are independent

 D) Historical data is always indicative of future trends

 Answer: A) Markets are always efficient

 Rationale: The Efficient Market Hypothesis is a common assumption in

many models, which posits that markets reflect all available information.

3. In the context of quantitative modeling, what does 'Monte Carlo

Simulation' refer to?

 A) A gambling strategy

 B) A risk assessment technique

 C) A type of regression analysis

 D) A portfolio optimization method

 Answer: B) A risk assessment technique

 Rationale: Monte Carlo Simulations are used to assess risk by

simulating a model's outcomes under various scenarios.

4. What is meant by 'model calibration'?

 A) Adjusting model parameters to fit historical data

 B) Testing the model with real market data

 C) Simplifying the model for easier computation

 D) Ensuring the model complies with regulatory standards

 Answer: A) Adjusting model parameters to fit historical data

 Rationale: Model calibration involves adjusting parameters so that the

model's outputs align with known data.