Free GARP 2016-FRR Exam Questions

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

Page: 1 / 69

Total 345 Questions | Updated On: Mar 26, 2025

Add To Cart

Question 1

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 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

Which one of the following four parameters is NOT a required input in the Black-Scholes model to price a foreign exchange option?

A : derlying exchange rates

B : derlying interest rates

C : crete future stock prices

D : tion exercise price

Answer: C

Question 4

Which one of the following changes would typically increase the price of a fixed income instrument, such as a bond?

A : crease in inflation rates in a country

B : Increase in time to maturity.

C : crease in risk premium.

D : crease in demand for goods and services.

Answer: A

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: Mar 26, 2025

Add To Cart