Free GARP 2016-FRR Exam Questions

Become GARP Certified with updated 2016-FRR exam questions and correct answers

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Total 390 Questions | Updated On: Mar 08, 2026

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Question 1

According to the principles of the Basel II Accord, which one of the following influences the implementation and relative weights of the elements of the operational risk framework?

A : The banks reporting currency

B : The banks regulatory capital level

C : The banks culture

D : The banks economic capital level

Answer: C

Question 2

Which one of the following four statements regarding the analysis of recoveries in operational risk reporting is correct?

A : Recoveries are usually driven by automated processes

B : Recovery analysts cannot be used to improve the recovery rate

C : Recovery analysis can demonstrate the importance of the operational risk function

D : The experience of personnel within the recovery team has no effect on the recovery rate

Answer: C

Question 3

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.

A : marginal cost of funds provided.

B : overhead cost of maintaining the loan and the account

C : inherent risk of lending to this borrower while providing a return on the risk capital used to the support the loan.

D : opportunity cost of risk-adjusted marginal cost of capital.

Answer: D

Question 4

For which one of the following four reasons do corporate customers use foreign exchange

derivatives?

I. To lock in the current value of foreign-denominated receivables

II. To lock in the current value of foreign-denominated payables

III. To lock in the value of expected future foreign-denominated receivables

IV. To lock in the value of expected future foreign-denominated payables

A :

B : I and IV

C : and III

D : II, III, IV

Answer: D

Question 5

Which one of the following four statements regarding the analysis of recoveries in operational risk reporting is correct?

A : Recoveries are usually driven by automated processes

B : Recovery analysts cannot be used to improve the recovery rate

C : Recovery analysis can demonstrate the importance of the operational risk function

D : The experience of personnel within the recovery team has no effect on the recovery rate

Answer: C

Page: 1 / 78

Total 390 Questions | Updated On: Mar 08, 2026

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