Free GARP FRM-Part-2 Exam Questions

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

Page:    1 / 101      
Total 503 Questions | Updated On: Mar 05, 2026
Add To Cart
Question 1

A risk manager uses the past 480 months of correlation data from the Dow Jones Industrial Average (Dow) to estimate the long-run mean correlation of common stocks and the mean reversion rate. Based on this historical data, the long-run mean correlation of Dow stocks was 34%, and the regression output estimates the following regression relationship: Y = 0.262 − 0.77X. Suppose that in April 2014, the average monthly correlation for all Dow stocks was 33%. What is the estimated one-period autocorrelation for this time period based on the mean reversion rate estimated in the regression analysis?


Answer: B
Question 2

Which of the following actions is not an advantage of the central counterparty (CCP) in the centralized clearing process?


Answer: A
Question 3

Liz Parker is a junior quantitative analyst who is preparing a report dealing with credit migration. An excerpt of her report contains the following statements:I. Future default probability will likely increase over time, especially for periods far into the future.II. When computing the default probability of a counterparty under a risk-neutral measure, we need to first determine the actual default probability.Which of Parker’s statements is (are) correct?


Answer: A
Question 4

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


Answer: D
Question 5

Firm A has $1 billion in highly liquid assets. In a sudden stressed scenario, it estimates that retail customers will withdraw $150 million in deposits, and retail customers will be able to make $80 million of loan repayments. Firm A must deal with $60 million of margin and collateral calls on its derivatives transactions due to falling collateral values and greater volatility of the underlying assets. In addition, the firm has utilized $90 million of its available $100 million liquidity facility. What is the estimate of Firm A’s stressed liquidity asset buffer?


Answer: C
Page:    1 / 101      
Total 503 Questions | Updated On: Mar 05, 2026
Add To Cart

© Copyrights DumpsCertify 2026. All Rights Reserved

We use cookies to ensure your best experience. So we hope you are happy to receive all cookies on the DumpsCertify.