GARP 2016-FRR DUMPS PDF OBTAIN EXAM RESULTS SIMPLY 2025

GARP 2016-FRR Dumps PDF Obtain Exam Results Simply 2025

GARP 2016-FRR Dumps PDF Obtain Exam Results Simply 2025

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Tags: Exam 2016-FRR Questions Fee, 2016-FRR New Study Notes, Exam 2016-FRR Fee, 2016-FRR Relevant Questions, 2016-FRR Reliable Exam Book

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GARP 2016-FRR exam is divided into two parts: Part I and Part II. Part I covers the fundamental concepts of financial risk and regulation, including risk management, financial markets and institutions, and regulatory compliance. Part II focuses on advanced topics such as market risk, credit risk, operational risk, and risk governance. 2016-FRR exam is designed to be comprehensive and challenging, ensuring that only the most qualified candidates are awarded certification.

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Information About the GARP 2016-FRR Certification Exam

>> Exam 2016-FRR Questions Fee <<

2016-FRR New Study Notes | Exam 2016-FRR Fee

Additionally, students can take multiple 2016-FRR exam questions, helping them to check and improve their performance. Three formats are prepared in such a way that by using them, candidates will feel confident and crack the Financial Risk and Regulation (FRR) Series (2016-FRR) actual exam. These three formats suit different preparation styles of 2016-FRR test takers.

GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q31-Q36):

NEW QUESTION # 31
The retail banking business of BankGamma has an expected P & L of $50 million and a VaR of $100 million.
The bank seeks to diversify its revenue, and is considering the opportunity to acquire a credit card business with an expected P & L of $50 million and a VaR of $150 million. What will be the overall RAROC if the bank acquires the new business?

  • A. 58%.
  • B. 33.3%.
  • C. 72%.
  • D. 50%.

Answer: B

Explanation:
To calculate the overall RAROC after acquiring the new business:
* Expected P&L (Profit and Loss): $50million+$50million=$100million$50 , text{million} + $50 ,
text{million} = $100 , text{million}$50million+$50million=$100million
* VaR (Value at Risk): Assuming diversification benefits are not considered, the total VaR would be
$100million+$150million=$250million$100 , text{million} + $150 , text{million} = $250 ,
text{million}$100million+$150million=$250million
* RAROC Calculation: frac{text{Expected P&L}}{text{VaR}} = frac{100 , text{million}}{250 ,
text{million}} = 0.4 or 40%
Thus, the closest answer from the provided options is 33.3%.


NEW QUESTION # 32
A trader inadvertently booked a trade with incorrect information. A subsequent market move resulted in a gain to the bank. Should the bank include this amount of gain into its operational loss event data program?
I. The bank should include this gain in its operational loss event data program as a gain realized due to operational risk events.
II. The bank should include this gain in its operational loss event data program as it indicates that a control failed or a process is flawed.
III. The bank should include this event in its operational loss event data program and record the gain as a loss resulting from operational risk.The bank should not include this event in its operational loss event data program as it is not a loss event, but a market risk event.

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

Answer: C

Explanation:
When a trader inadvertently books a trade with incorrect information and a subsequent market move results in a gain for the bank, the event should be included in the operational loss event data program because:
* Indication of Control Failure (II): The gain indicates that a control failed or a process is flawed. Even if the outcome was a gain, the underlying issue was a mistake, pointing to a weakness in the bank's operational controls that needs to be addressed.
* Recording the Event as a Loss (III): Although the event resulted in a gain, it should be included in the operational loss event data program and recorded as a loss. The principle behind this is to ensure that all operational risk events are tracked, irrespective of their financial outcome, to provide a complete picture of operational risk exposures and to improve risk management practices.
Including such events helps in identifying and correcting process flaws to prevent future incidents that could result in actual losses.
References
* How Finance Works.pdf, Index section


NEW QUESTION # 33
Bank Sigma has an opportunity to do a securitization deal for a credit card company, but has to retain a portion
of the residual risk of the deal with an estimated VaR of $8 MM. Its fees for the deal are $2 MM, and the
short-term financing costs are $600,000. What would be the RAROC for this transaction?

  • A. 25%
  • B. 17.5%
  • C. 33%
  • D. 12%

Answer: B


NEW QUESTION # 34
A risk associate is trying to determine the required risk-adjusted rate of return on a stock using the Capital
Asset Pricing Model. Which of the following equations should she use to calculate the required return?

  • A. Required return = risk-free return + 1/beta x market risk
  • B. Required return = risk-free return + beta x (1 - market risk)
  • C. Required return = (1-risk free return) + beta x market risk
  • D. Required return = risk-free return + beta x market risk

Answer: D


NEW QUESTION # 35
Which type of risk does a bank incur on loans that are in the "pipeline", i.e loans that are in the process of
origination but not yet originated?

  • A. Interest rate risk and credit risk
  • B. The bank does not incur any risk since the loan is not yet originated
  • C. Interest rate risk only
  • D. Credit Risk only

Answer: C


NEW QUESTION # 36
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Our 2016-FRR study materials boost the self-learning and self-evaluation functions so as to let the clients understand their learning results and learning process , then find the weak links to improve them. Through the self-learning function the learners can choose the learning methods by themselves and choose the contents which they think are important. Through the self-evaluation function the learners can evaluate their mastery degree of our 2016-FRR Study Materials and their learning process. The two functions can help the learners adjust their learning arrangements and schedules to efficiently prepare the exam.

2016-FRR New Study Notes: https://www.examcost.com/2016-FRR-practice-exam.html

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