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 21, 2026

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Question 1

Which of the following actions is not an advantage of the central counterparty (CCP) in the centralized clearing process?

A : Eliminate counterparty risk.

B : Risk reduction through multilateral netting.

C : Improve operational efficiency.

D : Loss mutualization.

Answer: A

Question 2

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 3

In an attempt to understand country risk, an analyst at Global Funds examines multiple sources of information to determine the truest measure of risk. She considers sovereign risk ratings, default risk spreads, and composite measures of risk. Which of the following sources relies on surveys of several hundred economists to measure sovereign risk?

A : The Economist.

B : Euromoney.

C : The World Bank.

D : Political Risk Services.

Answer: B

Question 4

The latest on-the-run (OTR) Treasury bond issued on March 1 is trading at a special spread of 0.25%. Traders expect the bond to trade at general collateral (GC) rates past June 30. The financing value of the OTR bond is therefore the value over 122 days.Given this information, the value of lending $100 of cash is closest to:

A : $0.085.

B : $0.305.

C : $0.250.

D : $0.847.

Answer: A

Question 5

The advanced internal ratings-based (A-IRB) approach for credit risk will no longer be permissible to use under the Basel III reforms for each of the following except:

A : mid-size corporate exposures.

B : large corporate exposures.

C : banks and other financial institutions.

D : residential and commercial real estate.

Answer: D

Page: 1 / 101

Total 503 Questions | Updated On: Mar 21, 2026

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