EXAM DUMPS 2016-FRR COLLECTION | 2016-FRR RELIABLE TEST QUESTIONS

Exam Dumps 2016-FRR Collection | 2016-FRR Reliable Test Questions

Exam Dumps 2016-FRR Collection | 2016-FRR Reliable Test Questions

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Tags: Exam Dumps 2016-FRR Collection, 2016-FRR Reliable Test Questions, Reliable 2016-FRR Test Braindumps, 2016-FRR Official Practice Test, Dump 2016-FRR Collection

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GARP 2016-FRR Exam covers a wide range of topics related to financial risk and regulation, including market risk, credit risk, operational risk, liquidity risk, and regulatory frameworks and compliance requirements. 2016-FRR exam is designed to be challenging and requires candidates to have a deep understanding of financial risk management and regulation.

The Global Association of Risk Professionals (GARP) is a non-profit organization that is dedicated to promoting risk management practices in the financial industry. One of the ways that GARP accomplishes this goal is by offering certification programs that validate the knowledge and expertise of risk professionals. One of the most prestigious and sought-after certifications offered by GARP is the Financial Risk and Regulation (FRR) Series Exam.

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Latest 2016-FRR Real Exam Questions, GARP 2016-FRR Practice Test, Financial Risk and Regulation (FRR) Series

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GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q253-Q258):

NEW QUESTION # 253
A large energy company has a recurring foreign currency demands, and seeks to use options with a pay-off based on the average price of the underlying asset on either a few specific chosen dates or all dates within a specific pricing window. Which one of the following four option types would most likely meet these specific foreign currency demands?

  • A. Asian options
  • B. European options
  • C. Chooser options
  • D. American options

Answer: A

Explanation:
Asian options are a type of derivative that have a payoff based on the average price of the underlying asset over a certain period or on specific dates. This averaging mechanism makes them particularly useful for companies with recurring foreign currency demands, as it helps smooth out volatility and provides a more stable hedge against currency fluctuations. Given the large energy company's need for an option that fits the description of averaging prices over specific dates or within a pricing window, Asian options are the most suitable choice.


NEW QUESTION # 254
Which of the following factors can cause obligors to default at the same time?
I). Obligors may be harmed by exposures to similar risk factors simultaneously.
II). Obligors may exhibit herd behavior.
III). Obligors may be subject to the sampling bias.
IV). Obligors may exhibit speculative bias.

  • A. II, III
  • B. I
  • C. I, II
  • D. III, IV

Answer: C

Explanation:
* Obligers may default simultaneously if they are harmed by exposure to similar risk factors, which means that an economic downturn or industry-specific issue affects multiple obligors at once.
* Herd behavior can lead to simultaneous defaults as obligors might follow the same trend, leading to a cascading effect of defaults.
* Sampling bias and speculative bias are not directly related to simultaneous defaults in the context of credit risk.
References:
How Finance Works: "Obligors may be harmed by exposures to similar risk factors simultaneously. Obligors may exhibit herd behavior."


NEW QUESTION # 255
What does Pillar 2 of the Basel II Accord focus on?

  • A. Ensuring that the bank properly manages all of the risks it takes
  • B. Identifying risk-weighted assets for reputational risk
  • C. Improving the transparency of the different types of banking risks
  • D. Ensuring that the bank has minimum levels of capital against market, credit, and operational risk

Answer: A

Explanation:
Comprehensive and Detailed In-Depth Explanation:
Pillar 2 of Basel II (Supervisory Review Process) focuses on ensuring banks have adequate processes to identify, measure, and manage all material risks (beyond just market, credit, and operational risks covered in Pillar 1), including interest rate risk in the banking book, concentration risk, and others. It requires banks to maintain capital above the Pillar 1 minimum if warranted by their risk profile, as assessed by supervisors.
Option D describes Pillar 1, not Pillar 2. Option B aligns with Pillar 3 (disclosure), and Option A (reputational risk) is not a specific Pillar 2 focus.
Reference:BCBS, "Basel II: International Convergence of Capital Measurement and Capital Standards," June
2006, para. 720-729; GARP FRR Study Notes, Regulatory Framework Section.


NEW QUESTION # 256
Which statements correctly describe the features of using subscription databases for operational loss data analysis?
Subscription databases
I. Provide central data repositories and benchmarking services to their members.
II. Can provide insight into whether the losses in a firm reflect the usual losses in their industry.
III. Assist with mapping the events to the appropriate business lines, risk categories and causes.
IV. Reflect only events that are interesting to the press and are reported in the press.

  • A. II, III, and IV
  • B. I and II
  • C. I, II and III
  • D. II and III

Answer: C

Explanation:
* Statement I: Subscription databases provide central data repositories and benchmarking services to their members.
* Verified and correct. These databases aggregate data from multiple sources to provide valuable benchmarking information.
* Statement II: Subscription databases can provide insight into whether the losses in a firm reflect the
* usual losses in their industry.
* Verified and correct. By comparing a firm's losses with industry data, firms can identify trends and anomalies.
* Statement III: Subscription databases assist with mapping the events to the appropriate business lines, risk categories, and causes.
* Verified and correct. Proper mapping helps in accurate risk assessment and management.
* Statement IV: Subscription databases reflect only events that are interesting to the press and are reported in the press.
* Incorrect. These databases aim to capture a wide range of operational loss events, not just those reported in the press.


NEW QUESTION # 257
The Treasury function of a bank typically manages all of the following components EXCEPT:

  • A. Bank's performance estimates
  • B. Bank's capital
  • C. Bank's assets and liabilities
  • D. Bank's liquidity

Answer: A

Explanation:
* Treasury Functions:
* Management of Assets and Liabilities: Treasury functions include managing the bank's balance sheet, which involves optimizing the mix of assets and liabilities.
* Management of Liquidity: Ensuring the bank has sufficient liquidity to meet its obligations.
* Management of Capital: Overseeing the capital adequacy to meet regulatory requirements and support the bank's operations and growth.
* Performance Estimates:
* Estimating and managing the bank's performance involves various departments, not typically the treasury function. Performance estimates would be more related to financial planning and analysis functions.
References
Source: How Finance Works


NEW QUESTION # 258
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