Free GARP FRM-Part-1 Exam Questions

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

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

Which of the following is not a reason to accumulate loss data?

Immunization is the process of o setting the e ects of interest-rate changes on the value of assets and liabilities. Coverage of liabilities with signi cant convexity may be more e ectively matched with a:

As a fund manager, Bryan Cole, CFA, is responsible for assessing the risk and return parameters of the portfolios he oversees. Cole is currently considering a portfolio consisting of only two stocks. The first stock, Remba Co., has an expected return of 12 percent and a standard deviation of 16 percent. The second stock, Labs, Inc., has an expected return of 18 percent and a standard deviation of 25 percent. The correlation of returns between the two securities is 0.25.Cole has the option of including a third stock in the portfolio. The third stock, Wimset, Inc., has an expected return of 8% and a standard deviation of 10 percent. If Cole constructed an equally weighted portfolio consisting of all three stocks, the portfolio's expected return would be closest to: