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: Feb 20, 2025

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Question 1

Which of the following statements about the interest rates and option prices is correct?

A : rho is positive, rising interest rates increase option prices.

B : rho is positive, rising interest rates decrease option prices.

C : interest rates rise, all options will rise in value.

D : interest rates fall, all options will rise in value

Answer: A

Question 2

BetaFin, a financial services firm, does not have retail branches, but has fixed income,

equity, and asset management divisions. Which one of the four following risk and control

self-assessment (RCSA) methods fits the firm's operational risk framework the best?

A : questionnaire approach

B : workshop approach

C : loss data approach

D : scenario analysis approach

Answer: B

Question 3

A bank considers issuing new capital to increase its Tier 1 capital levels. Which of the

following financial instruments would most likely to be considered?

A : ng-term and callable debt convertible to equity

B : nvertible preferred shares

C : ort-term callable debt

D : ort-term debt convertible to non-cumulative preferred shares

Answer: B

Question 4

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

Question 5

A bank customer expecting to pay its Brazilian supplier BRL 100 million asks Alpha Bank to

buy Australian dollars and sell Brazilian reals. Alpha bank does not hold reals so it asks for

a quote to buy Brazilian reals in the market. The market rate is 100. The bank quotes a

selling rate of 101 to its customer and sells the reals at this quoted price. Then the bank

immediately buys the real at the market rate and completes foreign exchange matched

transaction. What is the financial impact of this transaction for Alpha bank?

A : is transaction leaves the bank a profit of AUD 10,101.

B : is transaction leaves the bank a profit of BRL 10,101.

C : is transaction leaves the bank a loss of AUD 10,101.

D : is transaction leaves the bank a loss of BRL 10,101.

Answer: A

Page: 1 / 69

Total 345 Questions | Updated On: Feb 20, 2025

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