100% PASS QUIZ GARP - 2016-FRR - TRUSTABLE FINANCIAL RISK AND REGULATION (FRR) SERIES RELIABLE EXAM SIMULATIONS

100% Pass Quiz GARP - 2016-FRR - Trustable Financial Risk and Regulation (FRR) Series Reliable Exam Simulations

100% Pass Quiz GARP - 2016-FRR - Trustable Financial Risk and Regulation (FRR) Series Reliable Exam Simulations

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Tags: 2016-FRR Reliable Exam Simulations, Reliable 2016-FRR Exam Papers, Composite Test 2016-FRR Price, Exam 2016-FRR Pass Guide, Practice 2016-FRR Online

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What is the total cost for GARP 2016-FRR

The cost is 450 USD for non-members. This includes the cost of developing and administering your 2016-FRR, as well as the cost of the study materials you receive. But for the members of GARP, the examination fee is only 350USD. So all the members of GARP can enjoy an early bird discount.

Passing the GARP 2016-FRR Exam is an important milestone for any financial risk professional. It not only demonstrates a thorough understanding of the topics covered on the exam but also shows a commitment to professional development and ongoing learning. In addition, earning the FRR certification can open doors to new opportunities and career advancement within the financial risk industry. Employers value this certification because it indicates that an individual has the knowledge and skills necessary to manage risk effectively.

The Global Association of Risk Professionals (GARP) is a non-profit organization that aims to enhance the knowledge and skills of risk professionals worldwide. One of the ways in which GARP achieves this goal is through its certification programs. One of the most popular and well-respected certifications offered by GARP is the Financial Risk and Regulation (FRR) Series.

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Hot 2016-FRR Reliable Exam Simulations 100% Pass | High Pass-Rate 2016-FRR: Financial Risk and Regulation (FRR) Series 100% Pass

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GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q41-Q46):

NEW QUESTION # 41
Which of the following are the most common methods to increase liquidity in stressed conditions?
I. Selling or securitizing assets.
II. Obtaining additional credit lines.
III. Securing a better credit rating.

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

Answer: C

Explanation:
* I. Selling or securitizing assets:
* This is a common method to quickly generate liquidity during stressed conditions by converting non-liquid assets into cash.
* II. Obtaining additional credit lines:
* This method provides immediate access to additional funds when required, enhancing liquidity.
* III. Securing a better credit rating:
* While important for long-term financial health, this is not a direct method to increase liquidity in stressed conditions.
Thus, the most common methods to increase liquidity in stressed conditions are selling or securitizing assets and obtaining additional credit lines.
References:These methods are standard practices as detailed in the financial risk and regulation documentation, and they are widely recognized strategies for managing liquidity under stress.
Please refer to the provided financial documentation for further verification and detailed explanations .


NEW QUESTION # 42
To estimate the price of gold forwards, an investment analyst focuses on the cost of holding physical gold (bullion) and the cost of shorting the same. Given that physical gold spot price is $1,000, the annual risk-free rate is 5%, and the gold lease rate equals 2% annually, the analyst's best estimate of the gold forward price to equal

  • A. $950
  • B. $1030
  • C. $1070
  • D. $1100

Answer: B

Explanation:
To estimate the forward price of gold, the cost of holding physical gold and the cost of shorting it must be considered. The formula to calculate the forward price (F) is:
=×(1+)F=S×(1+rfrl)
where S is the spot price, rf is the risk-free rate, and rl is the lease rate.
Given:
* Physical gold spot price (S) = $1,000
* Annual risk-free rate (rf) = 5% or 0.05
* Gold lease rate (rl) = 2% or 0.02
Plugging in the values:
=1000×(1+0.050.02)=1000×1.03=1030F=1000×(1+0.050.02)=1000×1.03=1030
Therefore, the best estimate of the gold forward price is $1030.


NEW QUESTION # 43
When creating a model to estimate risk, it is important to recognize which one of the following?

  • A. Models that use historical data as an input can only estimate possible future market behavior
  • B. Models assume that tomorrow's market will be better than today's
  • C. Models assume that tomorrow's market will be worse than today's
  • D. Models that use historical data as an input predict future market behavior accurately

Answer: A

Explanation:
Comprehensive and Detailed In-Depth Explanation:
Risk models (e.g., VaR, stress testing) rely on historical data to estimate potential future outcomes, but they cannot predict the future with certainty due to inherent uncertainties and changing conditions. Option C correctly states that such models "estimate possible future market behavior," acknowledging their probabilistic nature. Option A and B are incorrect-models don't inherently assume better or worse markets; they extrapolate based on data. Option D is false-historical data-based models are not guaranteed to be accurate, as past patterns may not repeat. This aligns with Basel's emphasis on model limitations and the need for stress testing to complement historical estimates.
Exact Extract from Official Source:
* BCBS, "Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems," December 2010, para. 718(xi): "Models relying on historical data provide estimates of possible future outcomes but do not predict future market behavior with certainty, necessitating the use of stress scenarios to capture tail risks."
* GARP FRR Study Notes, Quantitative Analysis Section: "Risk models using historical data, such as VaR, offer probabilistic estimates of future market behavior, not definitive predictions, due to the limitations of assuming stationarity in financial markets." Reference:BCBS, "Basel III," para.718(xi); GARP FRR Study Notes, Quantitative Analysis Section.


NEW QUESTION # 44
A credit portfolio manager analyzes a large retail credit portfolio. Which of the following factors will represent typical disadvantages of market-linked credit risk drivers?
I. Need to supply a large number of input parameters to the model
II. Slow computation speed due to higher simulation complexity
III. Non-linear nature of the model applicable to a specific type of credit portfolios IV. Need to estimate a large number of unknown variable and use approximations

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

Answer: D

Explanation:
Market-linked credit risk drivers often face specific disadvantages:
* Need to supply a large number of input parameters to the model: Complex models require numerous data inputs, which can be challenging to obtain and maintain.
* Slow computation speed due to higher simulation complexity: The complexity of these models can lead to slower computation times, making them less efficient for real-time analysis.
Non-linear nature of models and the need to estimate unknown variables are also relevant but are not as primary disadvantages as the first two mentioned.
References
* Verified information from the document


NEW QUESTION # 45
A proprietary trading desk for a large bank hedges an Arab light OTC forward position with Brent crude oil forwards. The trading desk benefits from using the most liquid OTC market to hedge, the market for the Brent crude, but hedging its using the Brent contract, exposes itself to the following type of risk:

  • A. Term risk
  • B. Seasonality risk
  • C. Correlation risk
  • D. Basis risk

Answer: D

Explanation:
When a proprietary trading desk hedges an Arab light OTC forward position with Brent crude oil forwards, they face basis risk. This is because the underlying commodities (Arab light and Brent crude oil) are different and may not move perfectly in sync, leading to a potential mismatch in the hedge.
References
Verified based on the discussion of basis risk in commodity trading provided in the book "How Finance Works".


NEW QUESTION # 46
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