Free GARP FRM-Part-1 Exam Questions

Become GARP Certified with updated FRM-Part-1 exam questions and correct answers

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Total 533 Questions | Updated On: Mar 12, 2026

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Question 1

Suppose a bond with a par value of 1000 has coupon payments of 10% per annum and a yield to maturity of5%. If the bond has 4 years to maturity, what is the price of the bond?

A : 904.97

B : 841.51

C : 3628.22

D : 1177.3

Answer: D

Question 2

A market risk analyst at a regional bank is calculating the annual VaR of portfolio of investment securities. The portfolio has a current market value of USD 3,700,000 with a daily variance of 0.0004. Assuming there are 250 trading days in a year and the daily portfolio returns are independent and follow the same normal distribution with a mean of zero, what is the estimate of the 1-year VaR at the 95% confidence level?

A : USD 1,924,720

B : USD 2,721,519

C : USD 38,494

D : USD 121,730

Answer: A

Question 3

The investment banking division of a large German bank recently engaged a new client whose business is in direct competition with an existing client of the commercial banking division of the bank. A manager in the commercial banking division is concerned about conflicts of interest that may arise from providing both clients with a high level of customer service. What is of greatest concern to the manager regarding this situation?

A : The investment banking division pressuring commercial bankers to confirm material nonpublic information

B : The investment banking division pressuring commercial bankers to open a banking relationship with the new client

C : The investment banking division pressuring the banks brokers to buy certain securities for clients

D : The investment banking division pressuring researchers to generate buy recommendations for the new client

Answer: A

Question 4

Sue Johnson, FRM, has an elderly client with a very large asset base. The client intends to start divesting her fortune to various charities. Johnson is on the Board of a local charitable foundation. Johnson most appropriately:

A : should solicit the client herself, along with other Board members, to obtain a larger contribution.

B : can discuss her client's situation with the charitable foundation as long as she informs other local charities of her client's intentions.

C : must not discuss anything regarding her client and her client's intentions with the charitable foundation without permission.

D : can make this known to the charitable foundation so that they can solicit the client, since it is the client's wish to divest assets to charities in the future.

Answer: C

Question 5

The predictions that are generated from an underfitted model will likely have:

A : high bias and low variance.

B : high bias and high variance.

C : low bias and low variance.

D : low bias and high variance.

Answer: A

Page: 1 / 107

Total 533 Questions | Updated On: Mar 12, 2026

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