[Q107-Q125] 2024 Valid 2016-FRR Dumps for Helping Passing GARP Exam!

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2024 Valid 2016-FRR Dumps for Helping Passing GARP Exam!

Download Free GARP 2016-FRR Exam Questions & Answer

The Global Association of Risk Professionals (GARP) offers the Financial Risk and Regulation (FRR) Series Certification Exam to individuals who have an interest in risk management and regulation within the financial industry. The FRR Series exam is designed to evaluate an individual’s understanding of financial risk management and regulatory compliance as they relate to financial institutions. 2016-FRR exam covers topics such as market, credit, operational, and liquidity risk, as well as regulatory frameworks and guidelines.

NEW QUESTION 107
Banks duration match their assets and liabilities to manage their interest risk in their banking book. A bank has
$100 million in interest rate sensitive assets and $100 million in interest rate sensitive liabilities. Currently the
bank’s assets have a duration of 5 and its liabilities have a duration of 2. The asset-liability management
committee of the bank is in the process of duration-matching. Which of the following actions would best
match the durations?

Increase the duration of liabilities by 2 and increase the duration of assets by 1.

Increase the duration of liabilities by 2 and decrease the duration of assets by 1.

Decrease the duration of liabilities by 1 and increase the duration of assets by 1.

Decrease the duration of liabilities by 1 and decrease the duration of assets by 1.

NEW QUESTION 108
When trading exotic options, one needs to consider the following risks:
I. Spot foreign exchange risks
II. Forward foreign exchange risks
III. Plain vanilla options risks
IV. Option-specific risks

I, III

II, III, IV

I, II, IV

I, II, III, IV

NEW QUESTION 109
After entering the securitization business, Delta Bank increases its cash efficiency by selling off the lower risk
portions of the portfolio credit risk. This process ___ return on equity for the bank, because the cash generated
by the risk-transfer and the overall ___ of the bank’s exposure to the risk.

Increases; increase;

Increases; reduction;

Decreases; increase;

Decreases; reduction;

NEW QUESTION 110
For a bank a 1-year VaR of USD 10 million at 95% confidence level means that:

There is a 5% chance that the bank would lose less than USD 10 million in a year.

There is a 5% chance that the bank would lose more than USD 10 million in a year.

There is a 5% chance that the worst loss would be USD 10 million in a year.

There is a 5% chance that the least loss would be USD 10 million in a year.

NEW QUESTION 111
The exercise for an American type option prior to expiration day is virtually certain in the following case:

In the event of a high dividend for an in-the-money call option

In the event of a high dividend for an in-the-money put option

In the event of a low dividend for an in-the-money call option

In the event of a low dividend for an in-the-money put option

NEW QUESTION 112
A trader attempts to hold long positions when markets are rising and hold short positions when markets are
falling. Which one of the following four trading styles is she likely to use?

Technical trading

Contrarian trading

Black box trading

Market timing trading

NEW QUESTION 113
Which one of the following statements regarding collateralized mortgage obligations (CMO) is incorrect?

CMOs have senior tranches which are considered short-term, low-risk instruments by banks

CMOs are asset-backed securities that have pools of collateralized debt obligations (CDOs) as
underlying collateral.

CMOs are generally less risky investment than CDOs.

CMOs are pools of mortgages that are divided according to the timing of cash flows.

NEW QUESTION 114
Which of the following correctly identifies reasons for collecting internal operational risk event and loss
information?
I. Assessing the risk of specific areas of concern.
II. Evaluating risk events and outcomes.
III. Collecting data for capital modeling.
IV. Getting insight into risk events in other firms in the industry.

I and II

II and III

I, II and III

II, III, and IV

NEW QUESTION 115
A bank customer expecting to pay its Brazilian supplier BRL 100 million asks Alpha Bank to buy Australian
dollars and sell Brazilian reals. Alpha bank does not hold reals so it asks for a quote to buy Brazilian reals in
the market. The market rate is 100. The bank quotes a selling rate of 101 to its customer and sells the reals at
this quoted price. Then the bank immediately buys the real at the market rate and completes foreign exchange
matched transaction. What is the financial impact of this transaction for Alpha bank?

This transaction leaves the bank a profit of AUD 10,101.

This transaction leaves the bank a profit of BRL 10,101.

This transaction leaves the bank a loss of AUD 10,101.

This transaction leaves the bank a loss of BRL 10,101.

NEW QUESTION 116
Which of the following are among the main uses of risk reports?
I. Identification of exceptional situations that require managerial attention.
II. Display the relative risk among different trades.
III. Specify how RAROC will be maximized within the bank.
IV. Estimate the overall risk levels of the bank.

I, II and IV

II and III

II and IV

II, III, and IV

NEW QUESTION 117
Which one of the following four global markets for financial assets or instruments is widely believed to be the
most liquid?

Equity market.

Foreign exchange market.

Fixed income market

Commodities market

NEW QUESTION 118
By foreign exchange market convention, spot foreign exchange transactions are to be exchanged at the spot
date based on the following settlement rule:

One-day rule

Two-day rule

Three-day rule

Four-day rule

NEW QUESTION 119
A corporate bond was trading with 2%probability of default and 60% loss given default. Due to the credit
crisis the probability of default increased to 10% and the loss given default increased to 100%. Assuming that
the risk premium remained the same how did the credit spread change?

Increased by 1120 basis points

Increased by 880 basis points

Increased by 1000 basis points

Decreased by 880 basis points

NEW QUESTION 120
Unico Delta stock is trading at $20 per share, its annualized dividend yield is 5% and the 12-month LIBOR is
3%. Given these statistics, the 12-month futures contact will trade at:

$10.08

$20.04

$30.04

$40.08

NEW QUESTION 121
Which one of the following four statements regarding commodity exchanges is INCORRECT?

Banks have no natural direct exposure to commodities.

Banks trade in OTC contracts primarily to serve clients and facilitate client hedging and lending.

Customers rarely trade physical commodities with banks.

Commodity markets are mot liquid than debt markets.

NEW QUESTION 122
Bank Alpha is making a decision about lending 10-year loans in a sector that is fairly illiquid and is looking at
various options to fund the loans. Which of the following options to fund the loans exhibits the most
exogenous liquidity risk?

Overnight interbank markets

The 6-month LIBOR markets

The 1-year treasury markets

Foreign exchange markets

NEW QUESTION 123
Which of the following would a bank resort to as a “lender of last resort” in the event of an extreme liquidity
crisis?

U.S treasury markets

Discount window

LIBOR markets

Futures Markets

NEW QUESTION 124
Which type of risk does a bank incur on loans that are in the “pipeline”, i.e loans that are in the process of
origination but not yet originated?

Interest rate risk and credit risk

Interest rate risk only

Credit Risk only

The bank does not incur any risk since the loan is not yet originated

NEW QUESTION 125
Which one of the following four parameters is NOT a required input in the Black-Scholes model to price a
foreign exchange option?

Underlying exchange rates

Underlying interest rates

Discrete future stock prices

Option exercise price

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GARP 2016-FRR certification exam is known for its rigorous testing standards and is regarded as a highly respected and credible professional certification within the financial community. Candidates are required to pass a series of rigorous exams, including a 25-minute ethics exam, and a multiple-choice exam which covers a range of topics. 2016-FRR exam is computer-based and can be taken at various test centers throughout the world.

2016-FRR Exam Dumps For Certification Exam Preparation: https://www.passleadervce.com/Financial-Risk-and-Regulation/reliable-2016-FRR-exam-learning-guide.html

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