100% PASS QUIZ 2025 MARVELOUS GARP 2016-FRR: FINANCIAL RISK AND REGULATION (FRR) SERIES RELIABLE TEST DUMPS

100% Pass Quiz 2025 Marvelous GARP 2016-FRR: Financial Risk and Regulation (FRR) Series Reliable Test Dumps

100% Pass Quiz 2025 Marvelous GARP 2016-FRR: Financial Risk and Regulation (FRR) Series Reliable Test Dumps

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Tags: 2016-FRR Reliable Test Dumps, 2016-FRR Valid Exam Testking, 2016-FRR Formal Test, New 2016-FRR Exam Vce, Valid 2016-FRR Exam Papers

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Once you learn all 2016-FRR questions and answers in the study guide, try Lead2PassExam's innovative testing engine for exam like 2016-FRR practice tests. These tests are made on the pattern of the GARP real exam and thus remain helpful not only for the purpose of revision but also to know the real exam scenario. To ensure excellent score in the exam, Lead2PassExam’s braindumps are the real feast for all exam candidates. They contain questions and answers on all the core points of your exam syllabus. Most of these questions are likely to appear in the 2016-FRR Real Exam.

The Global Association of Risk Professionals (GARP) is a not-for-profit organization that offers various certification programs to professionals in the field of risk management. One of their most popular certifications is the Financial Risk and Regulation (FRR) Series Certification. Financial Risk and Regulation (FRR) Series certification program is designed to help individuals understand and manage financial risks in today's complex and constantly changing financial environment.

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GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q272-Q277):

NEW QUESTION # 272
After entering the securitization business, Delta Bank increases its cash efficiency by selling off the lower risk
portions of the portfolio credit risk. This process ___ risk on the residual pieces of the credit portfolio, and as a
result it ___ return on equity for the bank.

  • A. Increases; decreases;
  • B. Decreases; increases;
  • C. Decreases; increases;
  • D. Increases; increases;

Answer: D


NEW QUESTION # 273
Gamma Bank provides a $100,000 loan to Big Bath retail stores at 5% interest rate (paid annually). 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? What is the expected loss of this loan?

  • A. $750
  • B. $1,050
  • C. $300
  • D. $550

Answer: A

Explanation:
The same approach as question 29 is applied here but focuses on the straightforward default calculation without collateral consideration:
* Loan Amount (EAD): $100,000
* Loss Given Default (LGD): 50% of EAD =50%×$100,000=$50,000LGD=50%×$100,000=$50,000
* Annual Expected Default Rate: 2%
* Expected Loss: Annual Expected Default Rate × LGD
Expected Loss=2%×$50,000=0.02×50,000=$1,000Expected Loss=2%×$50,000=0.02×50,000=$1,000 Hence, the expected loss due to default is $1,000 without considering the collateral. If considering the collateral explicitly, it would be slightly different as the collateral reduces the direct exposure.


NEW QUESTION # 274
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. III, IV
  • B. I
  • C. I, II
  • D. II, III

Answer: C

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 # 275
Except for the credit quality of the Credit Default Swap protection seller, the following relationship correctly approximates the yield on a risk-free instrument:

  • A. Bond - CDS
  • B. Bond + CDS
  • C. Bond + CDS + Market Spread
  • D. Bond - CDS - Market spread

Answer: B

Explanation:
The relationship that approximates the yield on a risk-free instrument, excluding the credit quality of the Credit Default Swap (CDS) protection seller, is given by the combination of a bond and a CDS. The bond provides the base yield, and the CDS offers protection against default, together creating an instrument that mimics the characteristics of a risk-free yield by hedging against credit risk.
References
* Verified information on risk-free yield approximation from the document


NEW QUESTION # 276
SigmaBank has many branches that offer the same products and services. Which one of the four following statement presents an advantage of using RCSA questionnaire approach in the SigmaBank's operational risk framework?

  • A. The questionnaires are usually sent to specific nominated parties for completion.
  • B. The results can be collected electronically and the responses compared to identify themes, trends and areas of potential control weakness or elevated risk.
  • C. It provides a forum for an in-depth discussion of the operational risks in the firm.
  • D. This approach ensures that there has been full participation in the scoring, rather than a single view.

Answer: B

Explanation:
Using the RCSA questionnaire approach at SigmaBank, which has many branches offering the same products and services, allows for the collection of responses electronically. This facilitates easy comparison of results to identify common themes, trends, and areas of potential control weaknesses or elevated risks across branches.


NEW QUESTION # 277
......

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