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 27, 2025

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Question 1

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 2

At-the-point approaches tend to be:

A : neither counter- nor procyclical because they rarely change.

B : procycyclical.

C : countercyclical.

D : neither counter- nor procyclical because they change randomly.

Answer: B

Question 3

In the context of stress testing principles for banks, which of the following statements is correct regarding wrong-way risk? Wrong-way risk emerges when: there are changes in basis between the opening and closing of a futures

A : market conditions.

B : a company purchases an option on its own stock. the probability of default of counterparties increases as a result of general

C : a decline in an asset value may dry up its liquidity.

D : position.

Answer: A

Question 4

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:

A : accurate and statistical inference about the parameters will be valid.

B : inaccurate but statistical inference about the parameters will be valid.

C : inaccurate and statistical inference about the parameters will not be valid.

D : accurate but statistical inference about the parameters will not be valid.

Answer: C

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: Mar 27, 2025

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