Free GARP FRM-Part-2 Exam Questions

Become GARP Certified with updated FRM-Part-2 exam questions and correct answers

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Total 503 Questions | Updated On: Apr 03, 2026

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Question 1

Which of the following statements about expected shortfall estimates and coherent risk measures are true?

A : Expected shortfall estimates quantiles for the tail region and coherent risk measures estimate quantiles for the non-tail region only.

B : Expected shortfall and coherent risk measures estimate quantiles for the entire loss distribution.

C : Expected shortfall estimates quantiles for the entire distribution and coherent risk measures estimate quantiles for the tail region only

D : Expected shortfall and coherent risk measures estimate quantiles for the tail region.

Answer: D

Question 2

To ensure an adequate second line of defense, organizations should:

A : ensure that the audit function provides an independent risk management role.

B : look primarily to business owners because they own and manage the risks.

C : ensure that the first line of defense has proper oversight of the second line.

D : include the compliance and legal functions in risk oversight.

Answer: D

Question 3

Which of the following methods is not one of the three approaches for mapping a portfolio of fixed-income securities onto risk factors?

A : Cash flow mapping.

B : Present value mapping.

C : Duration mapping.

D : Principal mapping.

Answer: B

Question 4

A senior risk consultant is discussing different types of operational risk with a groupof managers at Bank JKY. During the discussion, the consultant describes theseven Basel event categories for the classification of operational losses andprovides examples of losses in each of the categories. Which of the followingdescribes an operational loss that Bank JKY should classify in the Execution,Delivery, and Process Management loss category?

A : The data capture system of Bank JKY fails to capture correct market prices, causingOTC derivative trades to occur at incorrect prices and resulting in significant losses.

B : A client files a lawsuit against Bank JKY for a breach of fiduciary responsibility in theclient’s investment account, and Bank JKY pays a monetary settlement to the client.

C : A corporate client of Bank JKY suffers a major financial loss from a cyber-attack andis therefore unable to make payments on its debt to Bank JKY, which triggers a default.

D : A rogue trader makes a series of unauthorized derivative trades, which areliquidated by Bank JKY for a sizable loss after the trades are discovered.

Answer: A

Question 5

Which of the following statements regarding scenario analysis workshops and brainstorming sessions at a large bank is most accurate?

A : The most common procedure is to withhold a “preparation pack” of documents from participants and distribute them after the generation phase to minimize any bias introduced to the sessions.

B : The participants in the workshops and sessions should be taken from a full range of seniority levels within the different business units.

C : The facilitators of the workshops and sessions should be taken from the board of directors and senior management.

D : The assumptions used in scenario analysis can only be based on real-life data.

Answer: D

Page: 1 / 101

Total 503 Questions | Updated On: Apr 03, 2026

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