2022 Latest 100% Exam Passing Ratio - 2016-FRR Dumps PDF
Pass Exam With Full Sureness - 2016-FRR Dumps with 345 Questions
Job opportunities after getting GARP 2016-FRR Certification
Once you have obtained the certification, there are various jobs available to you like Risks Management Specialist, Management Expert, Analyst, Consultant, or Manager. You can choose to work in an investment bank or a consultancy. 2016-FRR exam dumps are key to your success. You should be aware that the investment banking industry is extremely competitive, so you need to be very well-qualified for this job if you are interested in it. The management sector also has very high competitive pressures. This means that only the best managers will be able to secure this job because of their qualifications and experience. Rules can be found online to see who is eligible to take the GARP 2016-FRR Certification. Collection of meta mock tests are available online. You can download them and make your preparation easier.
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A certified GARP 2016-FRR professional can earn more compared to others, by preparing with the help of 2016-FRR exam dumps. The average salary for a certified GARP 2016-FRR professional is given as follow:
- In the United Kingdom: £55,000 - £75,000.
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The actual purpose of the GARP 2016-FRR Certification
The purpose of the Financial and Regulation (FRR) certification is to verify a candidate's ability to understand and live up to “the standard of knowledge, skill, and behavior” required by corporations for financial management professionals. It was developed with input from leading practitioners and academics and represents the body of knowledge and skills needed for success in this profession. 2016-FRR exam dumps and practice exams are helpful. Local regulators and management professionals have identified the GARP FRM certification as a benchmark for determining competence in financial management. Closed books, multiple-choice, and essay quizzes are used in the 2016-FRR to ensure the thoroughness of the subjects covered. Expressions of the candidate's reasons for answering each question are included in the scoring.
NEW QUESTION 156
Which one of the following four statements about regulatory capital for a bank is accurate?
- A. Regulatory capital is determined by rules imposed by an outside authority, such as a supervisor or
central bank. - B. Regulatory capital reflects the economic tradeoffs of the bank as accurately as the bank can represent
them. - C. Regulatory capital is the lowest level of economic capital the bank should have to meet regulatory
requirement. - D. Regulatory capital is less than the regulatory capital requirement.
Answer: A
NEW QUESTION 157
Which of the following are among the main uses of risk reports?
I. Identification of exceptional situations that require managerial attention.
II. Display the relative risk among different trades.
III. Specify how RAROC will be maximized within the bank.
IV. Estimate the overall risk levels of the bank.
- A. II, III, and IV
- B. II and IV
- C. I, II and IV
- D. II and III
Answer: C
NEW QUESTION 158
BetaFin, a financial services firm, does not have retail branches, but has fixed income, equity, and asset
management divisions. Which one of the four following risk and control self-assessment (RCSA) methods fits
the firm's operational risk framework the best?
- A. RCSA questionnaire approach
- B. RCSA workshop approach
- C. RCSA scenario analysis approach
- D. RCSA loss data approach
Answer: B
NEW QUESTION 159
Mega Bank holds a $250 million mortgage loan portfolio, which reprices every 5 years at LIBOR + 10%. The
bank also has $150 million in deposits that reprices every month at LIBOR + 3%. What is the amount of Mega
Bank's rate sensitive assets?
- A. $100 million
- B. $150 million
- C. $200 million
- D. $250 million
Answer: D
NEW QUESTION 160
Which one of the following four statements correctly identifies the Basel II Accord's definition of operational
risk?
- A. Operational risk is a form of risk that summarizes the risks a company or firm undertakes when it
attempts to operate within a given field or industry. - B. Operational risk is a risk arising from execution of a company's business functions.
- C. Operational risk is the risk of loss resulting from inadequate or failed processes, people and systems or
from external events. - D. Operational risk is all the risk that is not captured by market and credit risks.
Answer: C
NEW QUESTION 161
Jack Richardson wants to compute the 1-month VaR of a portfolio with a market value of USD 10 million,
with an average monthly return of 1% and average monthly standard deviation of 1.5%. What is the portfolio
VaR at 99% confidence level?
Probability Cumulative Normal distribution
0.90 1.282
0.91 1.341
0.92 1.405
0.93 1.476
0.94 1.555
0.95 1.645
0.96 1.751
0.97 1.881
0.98 2.054
0.99 2.326
- A. 232,600
- B. 246,750
- C. 164,500
- D. 348,900
Answer: D
NEW QUESTION 162
Which of the following reports have been suggested by the FDIC that banks should produce in addition to the
usual probabilistic analysis and stress tests in order to gauge liquidity issues?
I. Cash flow gaps
II. Funding availability
III. Critical assumptions used in credit projections
- A. I, III
- B. I, II
- C. I
- D. I, II, III
Answer: D
NEW QUESTION 163
Alpha Bank determined that Delta Industrial Machinery Corporation has 2% change of default on a one-year
no-payment of USD $1 million, including interest and principal repayment. The bank charges 3% interest rate
spread to firms in the machinery industry, and the risk-free interest rate is 6%. Alpha Bank receives both
interest and principal payments once at the end the year. Delta can only default at the end of the year. If Delta
defaults, the bank expects to lose 50% of its promised payment. Hence, the loss rate in this case will be
- A. 5%
- B. 3%
- C. 10%
- D. 1%
Answer: D
NEW QUESTION 164
Bank Sigma has an opportunity to do a securitization deal for a credit card company, but has to retain a portion
of the residual risk of the deal with an estimated VaR of $8 MM. Its fees for the deal are $2 MM, and the
short-term financing costs are $600,000. What would be the RAROC for this transaction?
- A. 25%
- B. 33%
- C. 12%
- D. 17.5%
Answer: D
NEW QUESTION 165
To quantify the aggregate average loss for the credit portfolio and its possible constituent subportfolios, a
credit portfolio manager should use the following metric:
- A. Factor sensitivity
- B. Credit VaR
- C. Unexpected loss
- D. Expected loss
Answer: D
NEW QUESTION 166
Arnold Wu owns a floating rate bond. He is concerned that the rates may fall in the future decreasing his
payment amount. Which of the following instruments should he buy to hedge against the fall in interest rates?
- A. Interest rate floor
- B. Index amortizing swap
- C. Interest rate swap that receives floating and pays fixed
- D. Interest rate cap
Answer: A
NEW QUESTION 167
A bank considers issuing new capital to increase its Tier 1 capital levels. Which of the following financial
instruments would most likely to be considered?
- A. Long-term and callable debt convertible to equity
- B. Convertible preferred shares
- C. Short-term debt convertible to non-cumulative preferred shares
- D. Short-term callable debt
Answer: B
NEW QUESTION 168
According to Basel II what constitutes Tier 1 capital?
- A. Equity capital and accrued profits to reserves
- B. Equity capital and core capital
- C. Core capital and innovative Tier 1 capital.
- D. Profits to reserves and innovative Tier 1 capital
Answer: C
NEW QUESTION 169
Which of the following attributes are typical for early models of statistical credit analysis?
- A. The underlying default assumptions failed to develop relatively simple formulas for the determination of
portfolio credit risk. - B. These models effectively incorporated herd behavior.
- C. The underlying default assumptions were analytically inconvenient.
- D. These models assumed the default of any obligor was independent of the default of any other.
Answer: D
NEW QUESTION 170
Which one of the following four statements about equity indices is INCORRECT?
- A. Capitalization-weighted equity indices are not generally considered better to track the performance of an
overall market. - B. Equity indices do not trade in cash form, rather, they are meant to track the overall performance of an
equity market. - C. Price-weighted equity indices give greater weight to shares trading at high prices.
- D. Equity indices are numerical calculations that reflect the performance of hypothetical equity portfolios.
Answer: A
NEW QUESTION 171
An options trader for a large institutional investor takes a long equity option position. Which of the following
risks need to be considered when taking this position?
I. All the risks of underlying equities
II. Perceived volatility changes
III. Future dividends yields
IV. Risk-free interest rates
- A. I, II
- B. III, IV
- C. II, III
- D. I, II, III, IV
Answer: D
NEW QUESTION 172
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. $20.04
- B. $40.08
- C. $30.04
- D. $10.08
Answer: A
NEW QUESTION 173
To estimate a partial change in option price, a risk manager will use the following formula:
- A. Partial change in option price = Delta x (1+ Change in underlying price)
- B. Partial change in option price = Delta x Gamma x (1+ Change in underlying price)
- C. Partial change in option price = Delta x Change in underlying price
- D. Partial change in option price = Delta x Gamma x Change in underlying price
Answer: C
NEW QUESTION 174
Why do regulatory standards impose formulaic capital calculations for all of the banks activities?
I. If the banks use different models it is difficult for a regulator to compare results across banks.
II. By imposing standardized calculations regulators can make sure that banks are not missing key risks in
their calculations.
III. By imposing standardized calculations regulators can make sure that banks do not use capital calculations
to game the banking regulation system.
- A. I,II, III
- B. I,II
- C. I
- D. II, III
Answer: A
NEW QUESTION 175
The market risk manager of SigmaBank is concerned with the value of the assets in the bank's trading book.
Which one of the four following positions would most likely be not included in that book?
- A. $10,000,000 loan to IBM worth $9,800,000.
- B. 300,000 options on IBM shares worth $10,000,000.
- C. 10,000 shares of IBM worth $10,000,000.
- D. $10,000,000 bond issued by IBM worth $11,000,000.
Answer: A
NEW QUESTION 176
Which one of the following four statements correctly defines an option's delta?
- A. Delta measures the expected decline in option with time and is usually expressed in years.
- B. Delta is the multiplier that best approximates the short-term change in the value of an option.
- C. Delta measures the effect of 1 bp in interest rate change on the option price.
- D. Delta measures the impact of volatility on the price of an option.
Answer: B
NEW QUESTION 177
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