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: Jun 06, 2025

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Question 1

Which of the following about the ratios between various Tiers of capital is not a requirement

of the Basel Committee?

A : er 2 capital cannot exceed 50% of the bank's total regulatory capital.

B : novative instruments in Tier 1 are limited to a maximum of 15% of Tier 1 capital.

C : wer Tier 2 capital may only equal 50% of core capital.

D : per Tier 2 capital may only equal 30% of core capital.

Answer: B

Question 2

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 3

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 4

PV01 is a method of describing interest rate risk. Which one of the following is a specific weakness of PV01?

A : PV01 overestimates convexity risk

B : PV01 is not very good at describing value change due to large changes in interest rates

C : PV01 underestimates the effect of small changes in interest rates

D : PV01 requires a large number of calculations to produce a reasonable estimate of the effect of interest rate changes

Answer: B

Question 5

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

A : uity market

B : reign exchange market.

C : xed income market

D : mmodities market

Answer: B

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Total 390 Questions | Updated On: Jun 06, 2025

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