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: Dec 13, 2021

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Question 1

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 2

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 3

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 4

What is a difference between currency swaps and interest rate swaps?

A : rrency swaps do not require the exchange of notional principal on maturity.

B : Currency swaps allow banks and customers to obtain the risk/reward profile of long-terminterest rates without having to use long-term funding.

C : rrency swaps are OTC derivative contracts.

D : rrency swaps generate foreign exchange rate risk in addition to interest rate risk.

Answer: D

Question 5

Which one of the following four global markets for financial assets or instruments is widely believed to be the most liquid?

A : uity market

B : reign exchange market.

C : xed income market

D : mmodities market

Answer: B

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Total 345 Questions | Updated On: Dec 13, 2021

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