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 10, 2026

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Question 1

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 2

Which of the following statements best characterizes the differences between the Ho-Lee model with drift and the lognormal model with drift?

A : In the Ho-Lee model and the lognormal model the drift terms are additive.

B : In the Ho-Lee model and the lognormal model the drift terms are multiplicative.

C : In the Ho-Lee model the drift terms are multiplicative, but in the lognormal model the drift terms are additive.

D : In the Ho-Lee model the drift terms are additive, but in the lognormal model the drift terms are multiplicative.

Answer: D

Question 3

Country X’s banking regulator established sector-specific cybersecurity requirements. This most likely indicates that Country X is a(n):

A : emerging economy with a homogenous banking system.

B : developed economy with a homogenous banking system.

C : emerging economy with a fragmented banking system.

D : developed economy with a fragmented banking system.

Answer: A

Question 4

A significant challenge in estimating the legal loss module of an operational risk stress test is that:

A : there is a lag between the macroeconomic event itself and the incurrence of legal losses.

B : banks are minimally impacted by legal losses.

C : future litigation cases cannot be estimated.

D : operational risks and legal losses cannot be separated.

Answer: A

Question 5

A risk manager at MAB Funds estimates that the fund’s one-week value at risk (VaR) is $1 million using a 95% probability. The fund can, therefore, be expected to lose:

A : no more than $1 million in a week 5% of the time.

B : no more than $1 million in a week 95% of the time.

C : an average of $1 million in a week 5% of the time.

D : an average of $1 million in a week 95% of the time.

Answer: B

Page: 1 / 101

Total 503 Questions | Updated On: Feb 10, 2026

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