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: Feb 18, 2026

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Question 1

Regarding the conditions for model selection criteria to demonstrate consistency, which of the following statements is true?I. The most consistent selection criteria with the greatest penalty factor for degrees of freedom is unbiased mean squared error.II. If we consider the fact that the true model may be much more complicated than the models under consideration, then the Akaike information criterion (AIC) measure should be examined.

A : I only.

B : Both I and II.

C : II only.

D : Neither I nor II.

Answer: C

Question 2

An analyst is regressing fund returns against the return on the Wilshire 5000 to determine whether beta is equal to 1.0. The analyst is trying to determine whether the number of observations should be increased. Which of the following is a reason why the test will have higher power if the number of observations is increased? The:

A : standard error of the regression will be lower.

B : constant of the regression will be closer to zero.

C : estimate of beta will be farther away from 1.0.

D : mean squared error of the regression will be lower.

Answer: A

Question 3

Which of the following liquidity de nitions is most likely associated with funding liquidity?

A : The length of time it will take an asset to regain its price after the price has fallen temporarily.

B : The loss that would be sustained by a trader who sells an asset and then immediately buys it back.

C : The number of units of an asset a trader can buy or sell at the current market quote (bid and ask prices).

D : The risk that investors may not be able to roll over short-term debt to nance the purchase of an asset.

Answer: D

Question 4

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

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: Feb 18, 2026

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