GARP 2016-FRR LATEST EXAM QUESTION, 2016-FRR NEW BRAINDUMPS QUESTIONS

GARP 2016-FRR Latest Exam Question, 2016-FRR New Braindumps Questions

GARP 2016-FRR Latest Exam Question, 2016-FRR New Braindumps Questions

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GARP 2016-FRR Certification Exam covers a wide range of topics, including financial risk management, regulatory compliance, financial markets and institutions, quantitative analysis, and ethical and professional standards. It is designed to assess the candidate's ability to apply theoretical concepts to real-world situations, making it an ideal credential for professionals working in the financial industry, such as risk managers, compliance officers, auditors, and regulators. 2016-FRR Exam is recognized globally, and passing the exam demonstrates a high level of expertise and commitment to the risk profession.

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2016-FRR Financial Risk and Regulation (FRR) Series Latest Exam Question - Free PDF Realistic GARP 2016-FRR

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GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q289-Q294):

NEW QUESTION # 289
According to the principles of the Basel II Accord, the implementation and relative weights of the elements of the operational risk framework depend on:
I. The culture of the financial institution
II. Regulatory drivers
III. Business drivers
IV. The bank's reporting currency

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

Answer: D

Explanation:
According to the principles of the Basel II Accord, the implementation and relative weights of the elements of the operational risk framework depend on the culture of the financial institution (I), regulatory drivers (II), and business drivers (III). The bank's reporting currency (IV) is not relevant to the implementation of the operational risk framework under Basel II.
References:Basel II Accord principles on operational risk.


NEW QUESTION # 290
Which one of the following four examples would not be considered a typical source of market risk?

  • A. Changes in the oil price due to the discovery of new oil fields.
  • B. Unexpected changes in the term structure of interest rates.
  • C. Increased default rate on commercial mortgages due to higher interest rates.
  • D. The JPY depreciating against the USD.

Answer: C


NEW QUESTION # 291
Which one of the following four options does NOT represent a benefit of compensating balances to the bank?

  • A. Since the compensating balances cannot be withdrawn at short notice, if at all, they are not considered
    transaction accounts and are able to provide a stable funding to the bank, reducing its reliance on more
    volatile external inter-bank based funding sources.
  • B. Compensating balances allow the bank to net some of the exposure they may have in case of default, by
    taking funds from these specific deposit account one the borrower defaults.
  • C. Since the compensating balances reduce the next amount lent to the borrower, the earned return on the
    loan is increased, further widening the bank's interest rate margin and profitability.
  • D. Compensation balances influence the expected loss rate of the bank given the default obligor and
    improve capital structure by controlling obligor type and avoiding payment delays.

Answer: D


NEW QUESTION # 292
Bank Alpha is making a decision about lending 10-year loans in a sector that is fairly illiquid and is looking at various options to fund the loans. Which of the following options to fund the loans exhibits the most exogenous liquidity risk?

  • A. The 6-month LIBOR markets
  • B. Overnight interbank markets
  • C. Foreign exchange markets
  • D. The 1-year treasury markets

Answer: B

Explanation:
Bank Alpha is making a decision about lending 10-year loans in a sector that is fairly illiquid. This type of lending requires stable and long-term funding sources to match the loan duration and illiquidity. Among the options provided:
* Overnight interbank markets: This option involves very short-term borrowing which needs to be rolled over frequently. The liquidity risk is high because the market conditions can change daily, making it the most exogenous liquidity risk as the availability and cost of funds can vary widely and unpredictably.
* The 6-month LIBOR markets: This is a short to medium-term funding option, still involving some liquidity risk due to the need for periodic refinancing, but less frequent than overnight markets.
* The 1-year treasury markets: Treasury markets are generally more stable and have lower liquidity risk compared to interbank markets. However, they still require annual refinancing.
* Foreign exchange markets: These markets add the complexity of currency risk along with liquidity risk.
Thus, overnight interbank markets exhibit the most exogenous liquidity risk due to the need for daily refinancing.
How Finance Works, relevant pages discussing liquidity risks associated with different funding options.


NEW QUESTION # 293
Which of the following statements are reasons for mathematical valuation and risk assessment models to be misleading or inaccurate?
I. There could be missing factors in models.
II. The data used as input for the model could be bad or wrong.
III. Model results could be misinterpreted.
IV. There could be errors in the derivation of the model.

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

Answer: A

Explanation:
Mathematical valuation and risk assessment models can be misleading or inaccurate for several reasons:
* Missing factors in models: Important variables or conditions might be overlooked.
* Bad or wrong data: Incorrect or poor-quality data input can lead to faulty outcomes.
* Misinterpretation of results: Users might not correctly understand or use the results.
* Errors in the derivation of the model: Mistakes in the mathematical formulation or assumptions can lead to errors.
All these factors contribute to the potential inaccuracy or misleading nature of such models.


NEW QUESTION # 294
......

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