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

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 : Neither I nor II.

B : II only.

C : Both I and II.

D : I only.

Answer: A

Question 2

If portfolio assets are perfectly correlated, portfolio VaR will equal:

A : component VaR.

B : undiversified VaR.

C : marginal VaR.

D : diversified VaR.

Answer: B

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

Time steps that enter into the calculation of the number of days in the margin period of risk include all of the following except:

A : valuation/margin call.

B : settlement.

C : close-out and re-hedge.

D : posting collateral.

Answer: D

Question 5

The structural model of credit risk is most likely a(n):

A : heterogenous model.

B : dynamic model.

C : random recovery rate model.

D : implied copula model.

Answer: B

Page: 1 / 101

Total 503 Questions | Updated On: Feb 19, 2026

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