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: Oct 29, 2025

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Question 1

Which of the following statements about the interest rates and option prices is correct?

A : rho is positive, rising interest rates increase option prices.

B : rho is positive, rising interest rates decrease option prices.

C : interest rates rise, all options will rise in value.

D : interest rates fall, all options will rise in value

Answer: A

Question 2

A bank customer can use either a plain vanilla option or an option contract with volumetric

flexibility to reduce the following risks:

I. Market Risk

II. Basis Risk

III. Operational Risk

A : I

B :

C : II

D : , III

Answer: C

Question 3

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 4

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 5

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

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

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

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

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

Answer: B

Page: 1 / 78

Total 390 Questions | Updated On: Oct 29, 2025

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