Free GARP 2016-FRR Exam Actual Questions

The questions for 2016-FRR were last updated On Apr 28, 2025

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Question No. 1

Which of the following would a bank resort to as a "lender of last resort" in the event of an extreme liquidity crisis?

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Correct Answer: B

Question No. 2

Which one of the following four statements regarding scenario analysis is correct?

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Correct Answer: A

Question No. 3

Which of the following statements about a bank's behavior regarding Risk Adjusted Return on Capital (RAROC) is correct?

I . A bank should always seek to maximize their overall RAROC.

II . A bank should consider investing in a business even with negative RAROC if it increases the RAROC of the bank as a whole.

III . A bank should minimize its overall RAROC by controlling the absolute and relative amount of risk of its businesses.

IV . A bank should maximize its RAROC by always investing in a new business that maximizes the RAROC for that business unit.

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Correct Answer: A

Question No. 4

What do option deltas measure?

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Correct Answer: C

Question No. 5

Rising TED spread is typically a sign of increase in what type of risk among large banks?

I . Credit risk

II . Market risk

III . Liquidity risk

IV . Operational risk

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Correct Answer: D