ARE YOU READY TO PROVE YOUR TECHNICAL KNOWLEDGE AND EXPERTISE WITH THE GARP 2016-FRR CERTIFICATION EXAM?

Are you ready to prove your technical knowledge and expertise with the GARP 2016-FRR certification exam?

Are you ready to prove your technical knowledge and expertise with the GARP 2016-FRR certification exam?

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The FRR Series is an essential certification for professionals working in financial risk management or regulatory compliance. It is recognized as a mark of excellence by employers and colleagues alike and can help individuals advance their careers in these fields. Additionally, the knowledge gained from studying for the FRR exams can help professionals improve their decision-making and risk management skills.

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2016-FRR Accurate Prep Material - 2016-FRR Latest Training

In today's technological world, more and more students are taking the Financial Risk and Regulation (FRR) Series (2016-FRR) exam online. While this can be a convenient way to take a Financial Risk and Regulation (FRR) Series (2016-FRR) exam dumps, it can also be stressful. Luckily, VerifiedDumps's best Financial Risk and Regulation (FRR) Series (2016-FRR) exam questions can help you prepare for your Financial Risk and Regulation (FRR) Series (2016-FRR) certification exam and reduce your stress. If you are preparing for the Financial Risk and Regulation (FRR) Series (2016-FRR) exam dumps our 2016-FRR Questions help you to get high scores in your 2016-FRR exam.

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.

Successful completion of the GARP 2016-FRR Exam demonstrates a candidate's expertise in financial risk management and regulatory compliance. It also provides a valuable addition to a candidate's resume, positioning them for career growth and advancement. Employers value this certification, as it signifies an individual's commitment to ongoing professional development and a dedication to industry best practices.

GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q309-Q314):

NEW QUESTION # 309
In early March, an energy trader takes a long position in natural gas futures for delivery in June, and hedges this exposure by taking a position in futures for July delivery. These trades were executed on the expectation that over time, the relative prices of the June and July contracts will come into alignment, the movement in these two contracts will largely mirror each other, and as a result of this, the net exposure is minimized and the position is protected against absolute price movements. However, if the two relative prices do not come into alignment with each other due to the scarcity of any of the two traded contracts in the futures market, the trader is likely to become exposed to the

  • A. Quality basis
  • B. Product basis
  • C. Calendar spreads basis
  • D. Location basis

Answer: C

Explanation:
The situation described involves a trader taking positions in futures contracts for different delivery months (June and July). If the prices of these contracts do not align due to the scarcity of either contract, the trader is exposed to calendar spread basis risk. This risk arises from the price difference between futures contracts with different expiration dates.
ReferencesVerified from the comprehensive details on calendar spreads and basis risks in the book "How Finance Works".


NEW QUESTION # 310
Which one of the four following statements about the Risk Adjusted Return on Capital (RAROC) is correct?
RAROC is the ratio of:

  • A. Profitability to the risk of a trading portfolio or bank business unit.
  • B. Profitability to the expected return of a trading portfolio or bank business unit.
  • C. Risk to the profitability of a trading portfolio or a business unit within the bank.
  • D. Value-at-risk to the profitability of a trading portfolio or a business unit.

Answer: A


NEW QUESTION # 311
What is a common implicit assumption that is made when computing VaR using parametric methods?

  • A. The expected returns are constant, but the standard deviation changes over time.
  • B. The mean of and the standard deviations of returns are both constant.
  • C. The standard deviations of returns are constant, but the mean changes over time.
  • D. The mean and standard deviation of returns change periodically in response to crises.

Answer: B

Explanation:
When computing VaR using parametric methods, a common implicit assumption is that both the mean and standard deviation of returns are constant over time.
* Constant Mean: The expected return of the asset or portfolio does not change over the time period considered.
* Constant Standard Deviation: The volatility of returns, which measures the dispersion of returns from the mean, is assumed to be constant.
This assumption simplifies the calculations as it allows the use of historical data to estimate future risks.
However, it may not always hold true in real-world scenarios where markets can exhibit changing volatility and return patterns.
References
* How Finance Works.pdf, p. 201


NEW QUESTION # 312
A bank has a Var estimate of $100 million. It is considering a new transaction which has a correlation of 0.35
with the current portfolio and a standalone VaR estimate of $5 million. What would be the new VaR for the
bank if it carried out the transaction?

  • A. $101.86 million
  • B. $100.22 million
  • C. $105 million
  • D. $ 213.67 million

Answer: A


NEW QUESTION # 313
Bank Milo has $4 million in cash and $5 million in loans coming due tomorrow with an expected default rate of 1%. The proceeds will be deposited overnight. The bank owes $ 9 million on a securities purchase that settles in two days and pays off $8 million in commercial paper in three days that is not expected to renew. On what days does the bank face negative cumulative liquidity?

  • A. Day 2 only.
  • B. Day 3 only.
  • C. Days 1, 2 and 3.
  • D. Days 2 and 3.

Answer: D

Explanation:
* Day 1:
* Bank Milo has $4 million in cash.
* $5 million in loans coming due with an expected default rate of 1%.
* The proceeds from the loans will be $5 million * (1 - 0.01) = $4.95 million.
* Total cash available at the end of Day 1 = $4 million + $4.95 million = $8.95 million.
* No outflows on Day 1.
* Cumulative liquidity = $8.95 million (positive).
* Day 2:
* No cash inflow.
* $9 million is due for a securities purchase.
* Cumulative liquidity = $8.95 million - $9 million = -$0.05 million (negative).
* Day 3:
* No cash inflow.
* $8 million due for commercial paper pay off.
* Cumulative liquidity = -$0.05 million - $8 million = -$8.05 million (negative).
Therefore, Bank Milo faces negative cumulative liquidity on Days 2 and 3.
References:Based on the financial risk and regulation analysis, these calculations align with standard liquidity management practices detailed in the provided materials.


NEW QUESTION # 314
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