Free GARP FRM-Part-1 Exam Questions

Given the spot rates for the 6-month and 1-year maturing bond, the 6-month forward rate 6 months from now is closest to:

A trader on the interest rate desk of a large bank entered into a customized 2-year interest rate swap contract on July 31, 2020, on a notional amount of USD 7.5 million. According to the terms of the swap, the bank received an annual fixed rate of 2.3% and paid an annual rate of SOFR as of the first day of the month of payment plus 1.95%. Payments were made every 6 months. The table below displays the relevant SOFR rates over the 2-year period:Date AND 6-month SOFR1-Jul-20: 0.11%1-Jan-21: 0.10%1-Jul-21: 0.05%1-Jan-22: 0.05%1-Jul-22: 1.52%Assuming no default, which of the following was the best estimate to the net amount that the bank paid or received on July 31, 2022?

Which of the following statements regarding securitization is least accurate?

It is April 15, and a trader is entered into a short position in two soybean meal futures contracts. The contracts expire on August 15, and call for the delivery of 100 tons of soybean meal each. Further, because this is a futures position, it requires the posting of a $3,000 initial margin and a $1,500 maintenance margin per contract. For simplicity, however, assume that the account is marked to market on a monthly basis. Assume the following represent the contract delivery prices (in dollars per ton) that prevail on each settlement date:April 15 (initiation) 173.00May 15 179.75June 15 189.00July 15 182.50August 15 (delivery) 174.25What is the equity value of the margin account on the May 15 settlement date, including any additional equity that is required to meet a margin call?

Immunization is the process of o setting the e ects of interest-rate changes on the value of assets and liabilities. Coverage of liabilities with signi cant convexity may be more e ectively matched with a: