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: Mar 11, 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

Which of the following measures is most likely an example of a dynamic financial correlation measure?

A : Pairs trading.

B : Copula correlations for collateralized debt obligations (CDOs).

C : Binomial default correlation model.

D : Value at risk (VaR).

Answer: A

Question 3

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

Question 4

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 5

A risk manager at MAB Funds estimates that the fund’s one-week value at risk (VaR) is $1 million using a 95% probability. The fund can, therefore, be expected to lose:

A : no more than $1 million in a week 5% of the time.

B : no more than $1 million in a week 95% of the time.

C : an average of $1 million in a week 5% of the time.

D : an average of $1 million in a week 95% of the time.

Answer: B

Page: 1 / 101

Total 503 Questions | Updated On: Mar 11, 2026

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