Free GARP 2016-FRR Exam Questions

Become GARP Certified with updated 2016-FRR exam questions and correct answers

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Total 345 Questions | Updated On: Nov 13, 2024

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Question 1

For which one of the following four reasons do corporate customers use foreign exchange

derivatives?

I. To lock in the current value of foreign-denominated receivables

II. To lock in the current value of foreign-denominated payables

III. To lock in the value of expected future foreign-denominated receivables

IV. To lock in the value of expected future foreign-denominated payables

A :

B : I and IV

C : and III

D : II, III, IV

Answer: D

Question 2

Company A needs to provide a risk probability/frequency score for its RCSA program. If the

event is likely to happen once in 2 years, then the frequency score will be equal to:

A : 0.2

B : 0.5

C : 1

D : 2

Answer: B

Question 3

An options trader for a large institutional investor takes a long equity option position. Which

of the following risks need to be considered when taking this position?

I. All the risks of underlying equities

II. Perceived volatility changes

III. Future dividends yields

IV. Risk-free interest rates

A : II

B : , III

C : I, IV

D : I, II, III, IV

Answer: D

Question 4

When a credit risk manager analyzes default patterns in a specific neighborhood, she finds that defaults are increasing as the stigma of default evaporates, and more borrowers default. This phenomenon constitutes

A : ral hazard

B : eculative bias

C : rd behavior

D : verse selection

Answer: C

Question 5

Which one of the four following statements about consortium databases is correct?

Consortium databases

A : ther information from news articles.

B : data from the top 5% of the industry.

C : ovide data to map risk categories with causes.

D : ntain anonymous information.

Answer: D

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Total 345 Questions | Updated On: Nov 13, 2024

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