Free Practice GARP 2016-FRR Exam Questions 2025

Stay ahead with 100% Free Financial Risk and Regulation (FRR) Series 2016-FRR Dumps Practice Questions

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Total 345 Questions | Updated On: Apr 22, 2025

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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

Which one of the four following statements about consortium databases is correct?

Consortium databases

A : Gather information from news articles.

B : Use data from the top 5% of the industry.

C : Provide data to map risk categories with causes.

D : Contain anonymous information.

Answer: D

Question 3

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

of the Basel Committee?

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

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

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

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

Answer: B

Question 4

What is a difference between currency swaps and interest rate swaps?

A : Currency swaps do not require the exchange of notional principal on maturity.

B : Currency swaps allow banks and customers to obtain the risk/reward profile of long-terminterest rates without having to use long-term funding.

C : Currency swaps are OTC derivative contracts.

D : Currency swaps generate foreign exchange rate risk in addition to interest rate risk.

Answer: D

Question 5

When trading exotic options, one needs to consider the following risks:

I. Spot foreign exchange risks

II. Forward foreign exchange risks

III. Plain vanilla options risks

IV. Option-specific risks

A : I, III

B : II, III, IV

C : I, II, IV

D : I, II, III, IV

Answer: D

Page: 1 / 69

Total 345 Questions | Updated On: Apr 22, 2025

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