2016-FRR Practice Online

Question 1

A corporate bond gives a yield of 6%. A same maturity government bond yields 2%. The

probability of the corporate bond defaulting is 2.5%. In case of default, investors expect to

lose 60% of their investment. The risk premium in the credit spread is:

A : 1.5%

B : 4.5%

C : 2.5%

D : 0.5%

Answer: C

Question 2

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 3

Which one of the following four global markets for financial assets or instruments is widely believed to be the most liquid?

A : Equity market

B : Foreign exchange market.

C : Fixed income market

D : Commodities market

Answer: B

Question 4

Which one of the following four options is NOT a typical component of a currency swap?

A : An initial currency exchange of the notional amount

B : Denomination of the original notional amount into a foreign currency

C : Periodic exchange of interest payments in different currencies

D : A final currency exchange

Answer: B

Question 5

Changes to which one of the following four factors would typically not increase the cost of credit?

A : Increasing inflation rates in a country.

B : Increase in consumption of goods and services

C : Higher risk premium on a fixed income instrument.

D : Higher return earned on alternative investments.

Answer: C

Name:	Financial Risk and Regulation (FRR) Series
Exam Code:	2016-FRR
Certification:	GARP Certification
Vendor:	GARP
Total Questions:	345
Last Updated:	May 14, 2024

Download Demo 2016-FRR Dumps

Create Account

Password Recovery

2016-FRR Practice Online

Download Demo 2016-FRR Dumps

Member Login

Create Account

Password Recovery

2016-FRR Practice Online