Free GARP FRM-Part-2 Exam Questions

A group of risk managers in a newly established asset management firm is assignedto implement the risk management process that includes three fundamentaldimensions: risk planning, risk budgeting and risk monitoring. The managers startby discussing the components of and the guidelines included in the risk plan. Whichof the following statements is correct?

Which of the following statements regarding risk management programs with service providers to manage outsourcing risk is correct?

AlphaStop sponsors a defined benefits pension plan. The company’s pension plan riskmanagement system generates reports based on movements in the assets and the surplus. Thepension management plan is not integrated with the firm's financial goals. The management hasaccess to daily risk reports, and the board receives monthly risk reports. Which of the followingis an accurate statement?

A model validation team at a bank is backtesting the bank’s VaR model. Inpreparation for the backtest, one of the team members expresses a concern that thevalidation process could result in the team committing a Type I error or a Type IIerror and discusses the characteristics of these errors with the team. Which of thefollowing is correct regarding Type I and Type II errors?

A risk analyst is implementing an enterprise risk management system at a bank. During the process, the analyst takes an inventory of risks faced by the bank and categorizes these risks as market, credit, or operational risks. Which of the following observations of the bank’s data should be considered unexpected if compared to similar industry data?