NEW 2016-FRR LEARNING MATERIALS, 2016-FRR TEST SIMULATOR

New 2016-FRR Learning Materials, 2016-FRR Test Simulator

New 2016-FRR Learning Materials, 2016-FRR Test Simulator

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Tags: New 2016-FRR Learning Materials, 2016-FRR Test Simulator, Latest 2016-FRR Examprep, 2016-FRR Valid Exam Objectives, 2016-FRR Practice Exam Fee

We all want to be the people who are excellent and respected by others with a high social status. If you want to achieve that you must boost an authorized and extremely useful 2016-FRR certificate to prove that you boost good abilities and plenty of knowledge in some area. Passing the test 2016-FRR Certification can help you realize your goal and if you buy our 2016-FRR latest torrent you will pass the 2016-FRR exam successfully. You can just free download the demo of our 2016-FRR exam questions to have a check the excellent quality.

GARP 2016-FRR exam is a rigorous and comprehensive assessment of a candidate's knowledge and understanding of financial risk management and regulation. It is an essential qualification for professionals working in the financial industry who are looking to advance their careers and stay up-to-date with the latest developments in financial risk management and regulation.

As the financial industry continues to grow and expand, so too does the need for qualified professionals who possess specialized knowledge in financial risk and regulation. The Global Association of Risk Professionals (GARP) recognizes this need and has developed the GARP 2016-FRR (Financial Risk and Regulation Series) certification exam to ensure that those working in the industry possess the necessary skills and knowledge.

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Financial Risk and Regulation (FRR) Series Exam Demo - 2016-FRR Torrent Vce & Financial Risk and Regulation (FRR) Series Pass Guide

Our GARP 2016-FRR web-based practice exam software also simulates the Financial Risk and Regulation (FRR) Series (2016-FRR) environment. These GARP 2016-FRR mock exams are also customizable to change the settings so that you can practice according to your preparation needs. DumpsActual web-based 2016-FRR Practice Exam software is usable only with a good internet connection.

GARP 2016-FRR Exam is recognized globally as a mark of excellence in risk management and regulation. Professionals who pass 2016-FRR exam are in high demand in the financial industry, and are often sought after by top-tier companies and institutions. Financial Risk and Regulation (FRR) Series certification provides a competitive advantage in a constantly evolving field and opens up new opportunities for career growth and advancement.

GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q335-Q340):

NEW QUESTION # 335
Asset and liability management is typically concerned with all of the following activities:
I. Maintaining the desired liquidity structure of the bank.
II. Managing the factors affecting the structure and composition of a bank's balance sheet.
III. Effectively transferring the interest rate risk in the banking book to the investment bank at a fair transfer price.
IV. Focusing on the circumstances impacting the stability of income the bank generates over time.

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

Answer: D

Explanation:
Asset and liability management (ALM) in banks is concerned with several key activities:
* Maintaining the desired liquidity structure of the bank (I): Ensuring that the bank has enough liquid assets to meet its short-term obligations.
* Managing the factors affecting the structure and composition of a bank's balance sheet (II): This includes managing the mix of assets and liabilities to optimize returns and minimize risks.
* Focusing on the circumstances impacting the stability of income the bank generates over time (IV): Ensuring that the bank's income is stable and sustainable by managing interest rate risk, credit risk, and other factors that could affect profitability.
References: No specific reference found in the document for this question. The provided answer is based on standard ALM practices in banking.


NEW QUESTION # 336
Which one of the following statements accurately describes market risk tolerance?

  • A. Market risk tolerance is the maximum 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 likely gain in the market value of portfolios over a given period of time.
  • D. Market risk tolerance is the minimum loss the bank is willing to bear due to fluctuations in market prices and rates.

Answer: A

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 # 337
Alpha Bank determined that Delta Industrial Machinery Corporation has 2% change of default on a one-year no-payment of USD $1 million, including interest and principal repayment. The bank charges 3% interest rate spread to firms in the machinery industry, and the risk-free interest rate is 6%. Alpha Bank receives both interest and principal payments once at the end the year. Delta can only default at the end of the year. If Delta defaults, the bank expects to lose 50% of its promised payment.
What may happen to the Delta's initial credit parameter and the value of its loan if the machinery industry experiences adverse structural changes?

  • A. Probability of default and loss at default may increase simultaneously, while duration rises causing the loan value to decrease.
  • B. Probability of default and loss at default may increase simultaneously, while duration falls causing the loan value to decrease.
  • C. Probability of default and loss at default may decrease simultaneously, while duration falls causing the loan value to decrease.
  • D. Probability of default and loss at default may decrease simultaneously, while duration rises causing the loan value to decrease.

Answer: A

Explanation:
* Probability of Default (PD) Increase: If the machinery industry experiences adverse structural changes, the economic conditions worsen for Delta Industrial Machinery Corporation. This results in a higher likelihood of financial distress and potential default. Therefore, the probability of default increases.
* Loss Given Default (LGD) Increase: In the event of adverse structural changes, the recovery rates on the loan may diminish due to potential decreases in the value of the company's assets. Hence, the bank might face higher losses if Delta defaults, leading to an increase in the loss given default.
* Duration and Loan Value: An increase in both PD and LGD generally signifies greater risk. To compensate for this increased risk, the loan might be extended or restructured, leading to a longer duration. Higher risk and longer duration typically decrease the present value of the loan, as the expected cash flows are discounted more heavily due to the increased risk.


NEW QUESTION # 338
Which one of the following four statements regarding scenario analysis is correct?

  • A. Scenario analysis only considers operational loss events that are within the current experience of the bank
  • B. External data on operational loss events is never used in scenario analysis
  • C. Banks use scenario analysis to evaluate their exposure to high-severity operational loss events which rarely occur
  • D. Unlike Risk and Control Self-Assessment (RCSA) analysis, scenario analysis mainly focuses on frequent but minor operational loss events

Answer: C

Explanation:
Comprehensive and Detailed In-Depth Explanation:
Scenario analysis assesses rare, high-severity operational loss events (e.g., major fraud, natural disasters) to estimate potential capital needs under Basel II's AMA. Option A is correct. Option B is false-scenario analysis targets severe events, unlike RCSA, which identifies frequent risks. Option C is incorrect-external data is often used (Basel II, para. 671). Option D is wrong-scenarios include hypothetical events beyond current experience.
Exact Extract from Official Source:
* BCBS, "Basel II: International Convergence of Capital Measurement and Capital Standards," June
2006, para. 672: "Scenario analysis is used to evaluate exposure to high-severity events... It complements historical loss data by considering rare but plausible loss scenarios."
* GARP FRR Study Notes, Operational Risk Section: "Scenario analysis focuses on tail events-high- impact, low-frequency losses-distinguishing it from RCSA's focus on routine risks." Reference:BCBS, "Basel II," para.672; GARP FRR Study Notes, Operational Risk Section.


NEW QUESTION # 339
Banks duration match their assets and liabilities to manage their interest risk in their banking book. Currently, the bank's assets and liabilities both have a duration of 10. To hedge against the risk of decreasing interest rates, the bank should
I. Increase the duration of the liabilities
II. Increase the duration of the assets
III. Decrease the duration of the liabilities
IV. Decrease the duration of the assets

  • A. I and II.
  • B. I only.
  • C. II and III.
  • D. I and IV

Answer: D

Explanation:
To hedge against the risk of decreasing interest rates, a bank should look to reduce the duration of its assets or increase the duration of its liabilities. Decreasing the duration of assets makes them less sensitive to interest rate changes, while increasing the duration of liabilities does the same on the liability side. The bank currently has both assets and liabilities with a duration of 10, so it should decrease the duration of its assets and/or increase the duration of its liabilities to hedge against decreasing interest rates.


NEW QUESTION # 340
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