Free GARP 2016-FRR Practice Test & Real Exam Questions

Which one of the following four alternatives lists the three most widely traded currencies on the global foreign exchange market, as of April 2007, in the decreasing order of market share? EUR is the abbreviation of the European euro, JPY is for the Japanese yen, and USD is for the United States dollar, respectively.

A credit analyst wants to determine a good pricing strategy to compensate for credit decisions that might have been made incorrectly. When analyzing her credit portfolio, the analyst focuses on the spreads in each loan to determine if they are sufficient to compensate the bank for all of the following costs and risks EXCEPT.

When creating a model to estimate risk, it is important to recognize which one of the following?

Which one of the following statements regarding collateralized mortgage obligations (CMO) is incorrect?

Which of the following are the most common methods to increase liquidity in stressed conditions?
I). Selling or securitizing assets.
II). Obtaining additional credit lines.
III). Securing a better credit rating.

For a bank a 1-year VaR of USD 10 million at 95% confidence level means that:

The mark-to-market process includes which one of the following activities?

The value of which one of the following four option types is typically dependent on both the final price of its underlying asset and its own price history?

PV01 is a method of describing interest rate risk. Which one of the following is a specific weakness of PV01?

Which of the following statements about the option gamma is correct? Gamma is the
I. Second derivative of the option value with respect to the volatility.
II. Percentage change in option value per percentage change in the price of the underlying instrument.
III. Second derivative of the value function with respect to the price of the underlying instrument.
IV. Rate of change of the option delta with respect to changes in the underlying price.

To manage its credit portfolio, Beta Bank can directly sell the following portfolio elements:
I). Bonds
II). Marketable loans
III). Credit card loans

Which one of the following four relationships should be used to price equity forwards or futures?

Bank Milo has $4 million in cash and $5 million in loans coming due tomorrow with an expected default rate of 1%. The proceeds will be deposited overnight. The bank owes $ 9 million on a securities purchase that settles in two days and pays off $8 million in commercial paper in three days that is not expected to renew. On what days does the bank face negative cumulative liquidity?

Which one of the following statements is an advantage of using implied volatility as an input when calculating VaR?