Free GARP FRM-Part-2 Exam Questions

Within the context of the three lines of defense model, risk champions (or risk specialists) are most likely to be included in which lines?

Which of the following risks is specifically recognized by the incremental risk charge (IRC)?

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?

A UK-based retail brokerage firm has recently experienced rapid growth through aseries of acquisitions and plans to improve its operational resilience in order tocomply with new requirements issued by national regulators. The CRO asks anoperational risk manager to assess best practices in this area and to suggestpotential actions that the firm should take to meet this objective. Which of thefollowing actions would be most appropriate for the manager to recommend in orderto comply with the regulatory guidelines concerning operational resilience forimportant business services?

A portfolio has an equal amount invested in two positions, X and Y. The expected excess return of X is 9% and that of Y is 12%. Their marginal VaRs are 0.06 and 0.075, respectively. To move toward the optimal portfolio, the manager will probably: