Free GARP FRM-Part-1 Exam Questions

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

Page: 1 / 107

Total 533 Questions | Updated On: Feb 18, 2026

Add To Cart

Question 1

All of the following are reasons that Nick Leeson engaged in aggressive speculative trading in the Barings Bank collapse except:

A : Barings’ lack of risk management oversight.

B : Barings’ risk management models were awed.

C : he was attempting to recover previous trading losses.

D : his authority over settlement operations allowed him to hide trading losses.

Answer: B

Question 2

Suppose you have a two-security portfolio containing bonds A and B. The book value of bond A is $20 and the market value is $35. The book value of bond B is $40 and the market value is $50. The duration of bond A is 4.7 and the duration of bond B is 5.9. Which of the following amounts is closest to the duration of the portfolio?

A : 5.3.

B : 5.6.

C : 5.4.

D : 5.5.

Answer: C

Question 3

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 4

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 5

Call and put option values are most sensitive to changes in the volatility of the underlying when:

A : calls are deep out-of-the-money and puts are deep in-the-money.

B : both calls and puts are at-the-money.

C : both puts and calls are deep out-of-the-money.

D : both calls and puts are deep in-the-money.

Answer: B

Page: 1 / 107

Total 533 Questions | Updated On: Feb 18, 2026

Add To Cart