Free Online GARP 2016-FRR Practice Test

Prepare Your GARP 2016-FRR Exam Questions with Free online 2016-FRR Practice Test. Get Brilliant Financial Risk and Regulation (FRR) Series Exam Results with Valid 2016 FRR Exam Dumps.

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Total 345 Questions | Updated On: May 16, 2024

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Question 1

If a bank is long £500 million pounds, short £300 million in delta-equivalent pound options,

and long £100 million in pound-denominated stocks, what is the amount of pound exposure

that would be shown in the aggregated risk reports?

A : £300 million pounds

B : £500 million pounds

C : £800 million pounds

D : £900 million pounds

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 : II

C : I, II

D : II, III

Answer: C

Question 3

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 ___ o the bank's exposure to the risk.

A : Increases; increase;

B : Increases; reduction;

C : Decreases; increase;

D : Decreases; reduction;

Answer: B

Question 4

A bank considers issuing new capital to increase its Tier 1 capital levels. Which of the

following financial instruments would most likely to be considered?

A : Long-term and callable debt convertible to equity

B : Convertible preferred shares

C : Short-term callable debt

D : Short-term debt convertible to non-cumulative preferred shares

Answer: B

Question 5

Which one of the four following statements about drawdowns is correct?

A : Drawdown calculates significant losses in a particular business or a book.

B : Drawdown estimates the effect on bank's liabilities when the bank's credit rating is cut.

C : Drawdown quantifies the peak-to-trough decline of an investment over a known timeperiod.

D : Drawdown measures the aggregate decline in market values of assets and positionsdue to a shock.

Answer: D

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Total 345 Questions | Updated On: May 16, 2024

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