DUMPS 2016-FRR GUIDE & LATEST 2016-FRR EXAM COST

Dumps 2016-FRR Guide & Latest 2016-FRR Exam Cost

Dumps 2016-FRR Guide & Latest 2016-FRR Exam Cost

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Tags: Dumps 2016-FRR Guide, Latest 2016-FRR Exam Cost, 2016-FRR Real Questions, Test 2016-FRR Centres, New 2016-FRR Exam Pdf

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One of the key benefits of earning the GARP FRR certification is the ability to demonstrate your expertise and credibility in the field of financial risk and regulation. Financial Risk and Regulation (FRR) Series certification is highly respected by employers and peers alike, and can help you advance your career and increase your earning potential. In addition, the GARP FRR certification is recognized by regulatory bodies around the world, making it an essential qualification for professionals who work in the financial services industry.

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GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q198-Q203):

NEW QUESTION # 198
The risk management department of VegaBank wants to set guidelines on commodity carry trades. Which of
the following strategies should she pursue to achieve a profitable commodity carry?
I. Buy short-term commodity futures and sell longer-dated position when the curve is in contango.
II. Buy short-term commodity futures and sell longer-dated position when the curve is in backwardation.
III. Buy long-term commodity futures and sell shorter-dated positions when the curve is in contango.
IV. Buy long-term commodity futures and sell shorter-dated positions when the curve is in backwardation.

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

Answer: C


NEW QUESTION # 199
Which one of the following four attributes would likely help a trader using exchange-traded options to establish a leveraged position?

  • A. Option positions have the same cash risks as a margined short futures purchase.
  • B. Higher degrees of exposure at less cash cost
  • C. Unlimited losses for long option positions
  • D. Option positions have the same credit risks as a margined long forward.

Answer: B

Explanation:
To establish a leveraged position using exchange-traded options, a trader would benefit from attributes that increase exposure while minimizing initial cash outlay.
* Higher degrees of exposure at less cash cost: Options provide significant leverage because they allow traders to control large positions with a relatively small amount of capital. This leverage is achieved through the options' pricing mechanism, where the premium paid is significantly less than the actual value of the underlying asset.
* Unlimited losses for long option positions: This is not an advantage for establishing a leveraged position. In fact, long option positions have limited losses, confined to the premium paid.
* Option positions have the same credit risks as a margined long forward: This is incorrect. Options have different risk profiles compared to margined long forwards, primarily because options confer the right but not the obligation to execute the contract.
* Option positions have the same cash risks as a margined short futures purchase: This is incorrect.
Options and futures have different risk and margin requirements, and they do not expose traders to the same cash risks.
Thus, the most advantageous attribute for a trader using exchange-traded options to establish a leveraged position is the higher degrees of exposure at less cash cost.
References
Source: How Finance Works


NEW QUESTION # 200
The data available to estimate the statistical distribution of bank losses is difficult to assemble for which of the
following reasons?
I. The needed data is vast in quantity.
II. The data requires bringing together significantly different measures of risk.
III. Some risks are difficult to quantify and hence the data might involve subjective elements.

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

Answer: C


NEW QUESTION # 201
Which one of the following inherent biases occurs in scenario analysis for operational risk?

  • A. Determinable bias
  • B. Motivation bias
  • C. Sampling bias
  • D. Optimism bias

Answer: C

Explanation:
Comprehensive and Detailed In-Depth Explanation:
Scenario analysis in operational risk involves constructing hypothetical loss events to estimate potential impacts. Sampling bias occurs when the scenarios selected do not represent the full range of possible outcomes (e.g., over-relying on historical data or excluding rare events), skewing risk estimates. Optimism bias (A) involves underestimating risks, motivation bias (D) reflects personal incentives, anddeterminable bias (C) isn't a recognized term. Basel II's AMA encourages diverse data sources to mitigate sampling bias in scenario analysis.
Exact Extract from Official Source:
* BCBS, "Basel II: International Convergence of Capital Measurement and Capital Standards," June
2006, para. 672: "Scenario analysis should incorporate a range of plausible events... Banks must avoid biases such as sampling bias, which can arise from unrepresentative data selection."
* GARP FRR Study Notes, Operational Risk Section: "Sampling bias in scenario analysis occurs when the chosen scenarios fail to capture the full spectrum of operational risk events, leading to under- or overestimation of potential losses." Reference:BCBS, "Basel II," para.672; GARP FRR Study Notes, Operational Risk Section.


NEW QUESTION # 202
Which one of the following four statements correctly defines an option's delta?

  • A. Delta measures the effect of 1 bp in interest rate change on the option price.
  • B. Delta is the multiplier that best approximates the short-term change in the value of an option.
  • C. Delta measures the impact of volatility on the price of an option.
  • D. Delta measures the expected decline in option with time and is usually expressed in years.

Answer: B


NEW QUESTION # 203
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