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: Apr 20, 2026

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Question 1

The technique of using interest rate swap positions to reduce the effect of the variability of interest rates on net interest income is known as:

A : Inoculation

B : Vaccination

C : Immunization

D : Insulation

Answer: C

Question 2

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

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

B : awdown 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

Question 3

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:

A : $10.08

B : $20.04

C : $30.04

D : $40.08

Answer: B

Question 4

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 5

Which one of the following is a typical source of funding for a commercial banks assets?

A : Consumer deposits

B : Cash

C : Commercial lending

D : Commodities markets

Answer: A

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Total 390 Questions | Updated On: Apr 20, 2026

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