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GARP 2016-FRR Exam Questions
- Topic 1: Credit Risk Management: This section of the exam measures skills of a Credit Risk Analyst and covers the assessment of credit risk, credit products risks, portfolio credit risk management, and the regulatory view of credit risk. It explains expected and unexpected losses, credit models, Basel Accords, credit default swaps, credit scoring, and stress testing credit exposures.
- Topic 2: Market Risk Management: This section of the exam measures skills of a Market Risk Analyst and covers the fundamentals of market risks across foreign exchange, interest rates, equities, and commodities. It explains market risk measurement tools like VaR and expected shortfall, examines trading strategies, market risk reporting, and the impact of Basel III on market risk.
- Topic 3: Operational Risk Management: This section of the exam measures skills of an Operational Risk Manager and covers the principles of operational risk management. It discusses operational risk identification, measurement, mitigation, monitoring, reporting, and the importance of governance frameworks such as the three lines of defense, along with loss data collection and scenario analysis.
- Topic 4: Asset and Liability Management: This section of the exam measures skills of a Treasury and ALM Specialist and covers asset and liability management frameworks, interest rate risk in the banking book, liquidity risk management, capital management, and non-trading market risks. It explains the roles of ALCO, treasury operations, Basel III liquidity measures, and management of funding risks.
Free GARP 2016-FRR Exam Actual Questions
Note: Premium Questions for 2016-FRR were last updated On Mar. 01, 2026 (see below)
Which one of the following changes would typically increase the price of a fixed income instrument, such as a bond?
Which of the following are conclusions that could be drawn from the shape of the statistical distribution of losses that a bank might incur over a future time period?
I . In most years a bank would look more profitable than it will be on average.
II . Most of the time a sufficiently well capitalized bank will appear over-capitalized.
III . Bad years do not come along very often, but when they do they lead to enormous losses.
Using the definitions used by JPMorgan Chase in their annual report, which of the following exposure types would be considered as a non-trading risk exposure?
I . Short term equity investments
II . Loans held to maturity
III . Mortgage servicing rights
IV . Derivatives used to manage asset/liability exposure.
Which of the following reports have been suggested by the FDIC that banks should produce in addition to the usual probabilistic analysis and stress tests in order to gauge liquidity issues?
I . Cash flow gaps
II . Funding availability
III . Critical assumptions used in credit projections
Which of the following statements explain how securitization makes the retail assets highly liquid and the balance sheet easier to manage?
I . By securitizing assets any lack of capital can be accommodated by selling the securitized bonds.
II . Any need to diversify credit risk can be achieved by selling bank's own securitized bonds and buying other bonds that increase diversification.
III . Securitization could be used to promote hedging by using limited market instruments.
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