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: Jan 28, 2026

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Question 1

Regarding a xed-rate, level payment, and fully amortized mortgage loan, which of the following statements is false?

A : Each payment consists of an interest component and a principal component.

B : Payments are equal over the life of the loan.

C : Principal repayment falls as interest payments rise over the life of the loan.

D : Interest payments fall as principal payments rise over the life of the loan.

Answer: C

Question 2

One of the basic requirements of a risk control process that a risk and control selfassessment program (RCSA) fails in is the:

A : expert opinion of managers.

B : ongoing assessment of the e ectiveness of risk management activities.

C : independent veri cation of risk identi cation and measurement.

D : identi cation of expected losses.

Answer: C

Question 3

The board of directors of a growing asset management company is conducting a review of the firm’s approach to risk management. The board concludes that the firm should establish an ERM framework. Which of the following represents a key benefit that the firm will likely attain after establishing an ERM framework?

A : Allowing the company to determine and make use of a higher risk appetite

B : Finding the optimal reporting methodology for each risk function

C : Taking advantage of the new opportunities that create value on a standalone basis

D : Improving the top-down communication and coordination in the company

Answer: D

Question 4

A fund holds $10 million nominal of the XYZ 5.5% 30-year bond. It enters into a one month dollar roll with arepo dealer bank in which it sells the security at a price of 100-08 and buys it back at a forward price of par.Assuming that the security experiences a 2% paydown (scheduled principal plus prepayments) during the term ofthe trade, estimate the value of the drop.

A : $25,000

B : $225,000

C : $200,000

D : $800,000

Answer: B

Question 5

An analyst is using key rate shifts to model the term structure of interest rates. For key rates the analyst has chosen the 1-year, 7-year, and 20-year yields. The rate changes that will have an e ect on a 5-year bond are:

A : 1-year, 7-year, and 20-year.

B : 1-year and 7-year.

C : 1-year.

D : 7-year.

Answer: B

Page: 1 / 107

Total 533 Questions | Updated On: Jan 28, 2026

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