Free GARP FRM-Part-1 Exam Questions

An analyst is currently considering a portfolio consisting of two stocks. The first stock, Remba Co., has an expected return of 12% and a standard deviation of 16%. The second stock, Labs, Inc., has an expected return of 18% and a standard deviation of 25%. The correlation of returns between the two securities is 0.25.If the analyst forms a portfolio with 30% in Remba and 70% in Labs, what is the portfolio's expected return?

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

Which of the following statements is true regarding the mixture of distributions for risk modeling?I. Distributions should never be combined.II. It may be helpful to create a new distribution if the underlying data you are working with does not currently fit a pre-determined distribution.

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

An analyst is estimating whether a fund's excess return for a quarter is related to interest rates and last quarter's excess return. The regression equation is found to have unconditional heteroskedasticity and serial correlation. Which of the following is most accurate? Parameter estimates will be: