GARP 2016-FRR Financial Risk and Regulation (FRR) Series Online Training
GARP 2016-FRR Online Training
The questions for 2016-FRR were last updated at Apr 25,2025.
- Exam Code: 2016-FRR
- Exam Name: Financial Risk and Regulation (FRR) Series
- Certification Provider: GARP
- Latest update: Apr 25,2025
Which of the following statements is a key difference between customer loans and interbank loans?
- A . Customers are less credit-worthy than banks on average and hence yields are higher on average for customer loans as compared to interbank loans
- B . Customer loans are of shorter duration than interbank loans
- C . Customer loans are easier to sell than interbank loans
- D . Interbank loans are more customized than commercial loans
Which of the following statements defines Value-at-risk (VaR)?
- A . VaR is the worst possible loss on a financial instrument or a portfolio of financial instruments over a given time period.
- B . VaR is the minimum likely loss on a financial instrument or a portfolio of financial instruments with a given degree of probabilistic confidence.
- C . VaR is the maximum of past losses over a given period of time.
- D . VaR is the maximum likely loss on a financial instrument or a portfolio of financial instruments over
a given time period with a given degree of probabilistic confidence.
A risk manager analyzes a long position with a USD 10 million value. To hedge the portfolio, it seeks to use options that decrease JPY 0.50 in value for every JPY 1 increase in the long position. At first approximation, what is the overall exposure to USD depreciation?
- A . His overall portfolio has the same exposure to USD as a portfolio that is long USD 5 million.
- B . His overall portfolio has the same exposure to USD as a portfolio that is long USD 10 million.
- C . His overall portfolio has the same exposure to USD as a portfolio that is short USD 5 million.
- D . His overall portfolio has the same exposure to USD as a portfolio that is short USD 10 million.
Which one of the following four statements about equity indices is INCORRECT?
- A . Equity indices are numerical calculations that reflect the performance of hypothetical equity portfolios.
- B . Equity indices do not trade in cash form, rather, they are meant to track the overall performance of an equity market.
- C . Capitalization-weighted equity indices are not generally considered better to track the performance of an overall market.
- D . Price-weighted equity indices give greater weight to shares trading at high prices.
In the United States, during the second quarter of 2009, transactions in foreign exchange derivative contracts comprised approximately what proportion of all types of derivative transactions between financial institutions?
- A . 2%
- B . 7%
- C . 25%
- D . 43%
Beta Insurance Company is only allowed to invest in investment grade bonds.
To maximize the interest income, Beta Insurance Company should invest in bonds with which of the following ratings?
- A . AAA
- B . AA
- C . A
- D . B
Using a forward transaction, Omega Bank buys 100 metric tones of aluminum for delivery in six-months’ time. However, after two months, the bank becomes concerned with the potential fluctuations in aluminum prices and wants to hedge its potential exposure against a possible decline in aluminum prices.
Which one of the following four strategies could the bank use to offset the risk from its current exposure to aluminum as it sets the price for selling the commodity in four-months’ time?
- A . Sell an aluminum futures contract
- B . Buy an aluminum futures contract
- C . Sell an aluminum forward contract
- D . Buy an aluminum forward contract
How could a bank’s hedging activities with futures contracts expose it to liquidity risk?
- A . The futures hedge may not work due to the widening of basis which could result in a loss for the bank.
- B . Prices may move such that a loss results on the hedge.
- C . Since futures require margins which are settled every day, the bank could find itself scrambling for funds.
- D . The bank could get exposed to liquidity risk since futures trade on an exchange.
Which one of the following four exercise features is typical for the most exchange-traded equity options?
- A . Asian exercise feature
- B . American exercise feature
- C . European exercise feature
- D . A shout option exercise feature
James Johnson has a $1 million long position in ThetaGroup with a VaR of 0.3 million, and $1 million long position in VolgaCorp with a VaR of 0.4 million. The returns of the two companies have zero correlation.
What is the portfolio VaR?
- A . $1 million
- B . $0.7 million
- C . $0.5 million
- D . $0.4 million
Latest 2016-FRR Dumps Valid Version with 342 Q&As
Latest And Valid Q&A | Instant Download | Once Fail, Full Refund
