HOT 2016-FRR NEW BRAINDUMPS FILES | AMAZING PASS RATE FOR 2016-FRR: FINANCIAL RISK AND REGULATION (FRR) SERIES | FREE PDF 2016-FRR INTERACTIVE COURSE

Hot 2016-FRR New Braindumps Files | Amazing Pass Rate For 2016-FRR: Financial Risk and Regulation (FRR) Series | Free PDF 2016-FRR Interactive Course

Hot 2016-FRR New Braindumps Files | Amazing Pass Rate For 2016-FRR: Financial Risk and Regulation (FRR) Series | Free PDF 2016-FRR Interactive Course

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Tags: 2016-FRR New Braindumps Files, 2016-FRR Interactive Course, 2016-FRR Guaranteed Questions Answers, Best 2016-FRR Study Material, 2016-FRR Latest Exam Experience

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GARP 2016-FRR Certification Exam is a rigorous and comprehensive exam that covers a wide range of topics related to financial risk management and regulation. 2016-FRR exam consists of two parts: Part I covers topics such as risk management, financial markets and products, and valuation and risk models, while Part II focuses on topics such as regulatory frameworks, compliance, and ethics. 2016-FRR exam is designed to test the knowledge, skills, and abilities of risk professionals who work in a variety of roles, including risk managers, traders, quantitative analysts, and compliance officers.

To ensure that candidates are adequately prepared for the exam, GARP provides a range of study materials and support services. This includes access to practice questions and exams, as well as opportunities to attend webinars and conferences that cover the topics tested on the exam. Additionally, GARP has a community of financial risk professionals who are available to offer guidance and support to candidates as they prepare for the exam.

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GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q72-Q77):

NEW QUESTION # 72
Which one of the following four statements correctly defines a non-exotic call option?

  • A. A call option gives the call option buyer the right, but not the obligation, to sell the underlying instrument at a known price in the future
  • B. A call option gives the call option buyer the right, but not the obligation, to buy the underlying instrument at a known price in the future
  • C. A call option gives the call option buyer the obligation, but not the right, to buy the underlying instrument at a known price in the future.
  • D. A call option gives the call option buyer the obligation, but not the right, to sell the underlying instrument at a known price in the future

Answer: B

Explanation:
A non-exotic (vanilla) call option gives the buyer the right, but not the obligation, to purchase the underlying asset at a predetermined price (strike price) on or before a specified expiration date. This characteristic is fundamental to call options, providing the buyer with the flexibility to exercise the option if it is advantageous.


NEW QUESTION # 73
Which one of the following statements accurately describes market risk tolerance?

  • A. Market risk tolerance is the minimum loss the bank is willing to bear due to fluctuations in market prices and rates.
  • B. Market risk tolerance is the maximum loss in the market value of financial instruments caused by the failure of the counterparty to meet its obligations.
  • C. Market risk tolerance is the maximum loss the bank is willing to bear due to fluctuations in market prices and rates.
  • D. Market risk tolerance is the maximum likely gain in the market value of portfolios over a given period of time.

Answer: C

Explanation:
Market risk tolerance refers to the maximum loss the bank is willing to bear due to fluctuations in market prices and rates. It defines the extent to which the bank is prepared to accept risk in its operations and investment strategies, helping to align its risk appetite with its strategic objectives.


NEW QUESTION # 74
Gamma Bank provides a $100,000 loan to Big Bath retail stores at 5% interest rate (paid annually). The loan is
collateralized with $55,000. The loan also has an annual expected default rate of 2%, and loss given default at
50%. In this case, what will the bank's expected loss be?

  • A. $1,300
  • B. $500
  • C. $750
  • D. $1,000

Answer: B


NEW QUESTION # 75
Gamma Bank is active in loan underwriting and securitization business, and given its collective credit exposure, it will be typically most interested in the following types of portfolio credit risk:
I. Expected loss
II. Duration
III. Unexpected loss
IV. Factor sensitivities

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

Answer: B

Explanation:
Gamma Bank, active in loan underwriting and securitization, would typically be most interested in:
* Expected Loss: The anticipated average loss from defaults in the credit portfolio.
* Unexpected Loss: The potential variability or deviation from the expected loss, critical for understanding the risk beyond average expectations.
Duration and factor sensitivities are more relevant to market risk rather than direct credit risk.
References
* Verified information from the document


NEW QUESTION # 76
Which one of the following four statements correctly defines a typical carry trade?

  • A. A bank borrows funds in a low-interest currency and places the funds on deposit in a high-interest currency.
  • B. A bank borrows funds in a low-interest currency, accumulates reserves, and lends in another low-interest currency.
  • C. A bank borrows funds in a high-interest currency and invests the funds into high-yield emerging market debt.
  • D. A bank borrows funds in a high-interest currency and places the funds in a long-term low volatility investment vehicle.

Answer: A

Explanation:
A carry trade typically involves borrowing in a currency with low-interest rates and investing in a currency with high-interest rates to profit from the difference in interest rates.
* Identify the currencies:
* Low-interest currency: Typically, these are currencies of countries with low-interest rates, such as Japan (JPY) or Switzerland (CHF).
* High-interest currency: These are currencies of countries with high-interest rates, such as emerging market currencies or certain developed countries during specific periods.
* Mechanics of carry trade:
* The bank borrows in a low-interest currency.
* The bank then converts these funds into a high-interest currency.
* The funds are deposited or invested in high-yield instruments denominated in the high-interest currency.
* The profit arises from the differential between the interest paid on the borrowed currency and the interest earned on the invested currency.
This strategy benefits from interest rate differentials and can yield significant profits if exchange rates remain stable or move favorably.
ReferencesSource: How Finance Works


NEW QUESTION # 77
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