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: Apr 02, 2026
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Question 1

A trader on the interest rate desk of a large bank entered into a customized 2-year interest rate swap contract on July 31, 2020, on a notional amount of USD 7.5 million. According to the terms of the swap, the bank received an annual fixed rate of 2.3% and paid an annual rate of SOFR as of the first day of the month of payment plus 1.95%. Payments were made every 6 months. The table below displays the relevant SOFR rates over the 2-year period:Date AND 6-month SOFR1-Jul-20: 0.11%1-Jan-21: 0.10%1-Jul-21: 0.05%1-Jan-22: 0.05%1-Jul-22: 1.52%Assuming no default, which of the following was the best estimate to the net amount that the bank paid or received on July 31, 2022?


Answer: C
Question 2

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


Answer: C
Question 3

A risk manager at Firm SPC is testing a portfolio for heteroskedasticity using the White test. The portfolio is modeled as follows: The residuals are computed as follows: Which of the following correctly depicts the second step in the White test for the portfolio?


Answer: D
Question 4

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?


Answer: C
Question 5

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


Answer: A
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Total 533 Questions | Updated On: Apr 02, 2026
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