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: Jan 29, 2026

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Question 1

Which of the following concepts is not one of the four areas of cyber risk management and incident response and recovery?

A : Architecture and standard.

B : Supervision of cyber-resilience.

C : Cybersecurity and resilience metrics.

D : Incident response and recovery.

Answer: A

Question 2

If one of the entities in the CDX NA IG index defaults, the CDS index would most likely:

A : continue with 124 entities, and the notional principal of each entity would remain the same.

B : continue with a replacement entity, with no change to the notional principal.

C : continue with 99 entities, and the notional principal of each entity would be reduced by 1%.

D : make a payoff and be discontinued.

Answer: A

Question 3

The four-quadrant approach categorizes information security risks as:

A : internal versus external and in house versus third party.

B : internal versus external and intentional versus unintentional.

C : intentional versus unintentional and digital versus physical.

D : intentional versus unintentional and theft versus corruption.

Answer: B

Question 4

If the unconditional default probability of a Ba-rated bond during Year 3 is 1.914% and the probability of survival through Year 2 is 97.413%, the probability of a default during Year 3, conditional on no earlier default, is closest to:

A : 0.673%.

B : 1.914%.

C : 2.587%.

D : 1.965%.

Answer: D

Question 5

Assuming a loan portfolio of L, a recovery rate of RR, and the percentage of losses on a portfolio less than V(T, X), which of the following formulas is used to estimate credit VaR?

A : L × (1 − RR) × V(T, X).

B : L × (1 − RR) / V(T, X).

C : L × (RR) × V(T, X).

D : V(T, X) / [L × (1 − RR)].

Answer: A

Page: 1 / 101

Total 503 Questions | Updated On: Jan 29, 2026

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