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Latest 2016-FRR Practice Materials | 2016-FRR Reliable Exam Prep

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2016-FRR Reliable Exam Prep - Actual 2016-FRR Tests

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Because the GARP 2016-FRR Exam covers a broad range of topics, it requires thorough preparation and a deep level of understanding of financial risk assessment, management, and regulatory compliance concepts. Those candidates who wish to sit for the exam should be prepared to spend many hours studying and reviewing the exam material, which includes textbooks, case studies, and real-world scenarios. However, earning the FRR credential can help increase your professional credibility and open doors to new career opportunities in the financial services industry.

To be eligible to take the GARP 2016-FRR Certification Exam, candidates must have a minimum of two years of work experience in the financial industry, with a focus on risk management and regulation. They must also have completed GARP's FRR Part 1 exam, which covers basic concepts in risk management and regulation.

GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q117-Q122):

NEW QUESTION # 117
Foreign exchange rates are determined by various factors. Considering the drivers of exchange rates, which one of the following changes would most likely strengthen the value of the USD against other foreign currencies?

A. The expected US inflation rate increases
B. The US current account surplus increases
C. The economic performance in the US weakens
D. The global demand for US products decreases

Answer: B

Explanation:
The value of the USD against other foreign currencies is influenced by various factors. An increase in the US current account surplus (D) would likely strengthen the value of the USD. This is because a current account surplus indicates that the US is exporting more goods and services than it is importing, leading to higher demand for the USD by foreign buyers who need it to pay for US exports. This increased demand for the USD relative to other currencies results in an appreciation of the USD.

NEW QUESTION # 118
A credit associate extending a loan to an obligor suspects that the obligor may change his behavior after the loan has been originated. The obligor in this case may use the loan proceeds for purposes not sanctioned by the lender, thereby increasing the risk of default. Hence, the credit associate must estimate the probability of default based on the assumptions about the applicability of the following tendency to this lending situation:

A. Adverse selection
B. Speculation
C. Short bias
D. Moral hazard

Answer: D

Explanation:
Moral hazard occurs when one party in a contractual relationship can take risks because the consequences of those risks will be borne by another party. In this scenario, the credit associate is concerned that the obligor might use the loan proceeds for purposes not sanctioned by the lender, thereby increasing the risk of default.
This situation is a classic example of moral hazard, where the obligor's behavior after receiving the loan could change in a way that increases the lender's risk without the lender having control over those actions.

NEW QUESTION # 119
US-based BetaBank have accumulated Japanese yen, Japanese government bonds, options on Japanese yen, and positions in commodities that have a positive correlation with yen. Which one of the four following non- statistical risk measures could be used to evaluate the BetaBank's exposure to the Japanese economy?

A. Position volatility
B. Position sensitivities
C. Position turnover
D. Position concentrations

Answer: D

Explanation:
To evaluate BetaBank's exposure to the Japanese economy, we should consider measures that reflect the bank' s positions and their potential sensitivity to economic changes in Japan:
* Position Turnover:
* This measures how frequently positions are changed or traded, which does not directly indicate exposure to economic conditions.
* Position Concentrations:
* This indicates how concentrated the bank's positions are in certain assets or markets. High concentration in Japanese assets (yen, Japanese government bonds, etc.) would indicate high exposure to the Japanese economy.
* Position Volatility:
* This measures how much the value of positions fluctuates, which can indicate risk but does not specifically measure economic exposure.
* Position Sensitivities:
* This measures how sensitive positions are to changes in underlying factors, such as interest rates or exchange rates. This could also be relevant but does not directly indicate exposure to the economy as a whole.
Thus, position concentrations are a key measure to evaluate BetaBank's exposure to the Japanese economy.
References
Source: How Finance Works

NEW QUESTION # 120
The Basel II Accord's operational risk definition excludes all of the following items EXCEPT:

A. Legal risk
B. Geopolitical risk
C. Reputational risk
D. Strategic risk

Answer: A

Explanation:
The Basel II Accord's operational risk definition specifically includes legal risk. Operational risk under Basel II is defined as the risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events. This definition explicitly includes legal risk but excludes strategic and reputational risks.

NEW QUESTION # 121
Which of the following statements regarding collateralized debt obligations (CDOs) is correct?
I. CDOs typically have loans or bonds as underlying collateral.
II. CDOs generally less risky than CMOs.
III. There is a correlation among defaults in the CDO collateral which should be considered in valuation of
these complex instruments.

A. I only
B. I, II, and III
C. I and III
D. II and III

Answer: C

NEW QUESTION # 122
......

The Financial Risk and Regulation (FRR) Series (2016-FRR) certification exam is a valuable credential that is designed to validate the candidates' skills and knowledge level. The 2016-FRR certification exam is one of the high in demand industrial recognized credentials to prove your skills and knowledge level. With the GARP 2016-FRR Certification Exam everyone can upgrade their skills and become competitive and updated in the market.

2016-FRR Reliable Exam Prep: https://www.newpassleader.com/GARP/2016-FRR-exam-preparation-materials.html

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