GARP 2016-FRR Exam - Topic 3 Question 17 Discussion

Actual exam question for GARP's 2016-FRR exam

Question #: 17
Topic #: 3

[All 2016-FRR Questions]

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.

AI, II, III IV

BIII and IV

CI, II, and III

DI, III, and IV

Show Suggested Answer

Suggested Answer: A

by Tamekia at Apr 02, 2026, 03:54 PM

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Margurite

18 days ago

I agree, bad data is a huge issue too!

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Kallie

23 days ago

Missing factors can totally skew results.

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In

1 month ago

I vaguely recall that errors in model derivation can also lead to inaccuracies, which makes me think IV should be considered too.

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Corinne

2 months ago

I think misinterpretation of results is a common problem we talked about, so III definitely seems relevant.

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Twana

2 months ago

I'm not entirely sure, but I feel like bad data is a huge issue too, so maybe II should be included as well.

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Latosha

2 months ago

I remember discussing how missing factors can really skew the results, so I think I would lean towards including I.

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