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: Feb 19, 2026

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Question 1

Country X’s banking regulator established sector-specific cybersecurity requirements. This most likely indicates that Country X is a(n):

A : emerging economy with a homogenous banking system.

B : developed economy with a homogenous banking system.

C : emerging economy with a fragmented banking system.

D : developed economy with a fragmented banking system.

Answer: A

Question 2

Which of the following statements best characterizes the differences between the Ho-Lee model with drift and the lognormal model with drift?

A : In the Ho-Lee model and the lognormal model the drift terms are additive.

B : In the Ho-Lee model and the lognormal model the drift terms are multiplicative.

C : In the Ho-Lee model the drift terms are multiplicative, but in the lognormal model the drift terms are additive.

D : In the Ho-Lee model the drift terms are additive, but in the lognormal model the drift terms are multiplicative.

Answer: D

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

At inception, the tranches in a synthetic CDO are priced to earn a spread that is:

A : higher for senior tranches, as they represent a larger notional principal.

B : aggregate in amount to the premium paid to binary CDSs.

C : consistent with their seniority.

D : equal for each tranche.

Answer: C

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: Feb 19, 2026

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