100% PASS QUIZ 2025 GARP FANTASTIC 2016-FRR: LATEST FINANCIAL RISK AND REGULATION (FRR) SERIES TEST QUESTION

100% Pass Quiz 2025 GARP Fantastic 2016-FRR: Latest Financial Risk and Regulation (FRR) Series Test Question

100% Pass Quiz 2025 GARP Fantastic 2016-FRR: Latest Financial Risk and Regulation (FRR) Series Test Question

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Tags: Latest 2016-FRR Test Question, 2016-FRR Actual Dump, 2016-FRR Certified Questions, Free 2016-FRR Dumps, 2016-FRR Reliable Exam Practice

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The FRR Series is an essential certification for professionals looking to enhance their knowledge in financial risk management and regulatory compliance. The series is globally recognized and provides candidates with the opportunity to advance their careers in the finance industry. With its rigorous curriculum and challenging exam format, the FRR Series is a valuable investment for any finance professional looking to stay ahead in their field.

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2016-FRR Actual Dump, 2016-FRR Certified Questions

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GARP 2016-FRR certification exam is known for its rigorous testing standards and is regarded as a highly respected and credible professional certification within the financial community. Candidates are required to pass a series of rigorous exams, including a 25-minute ethics exam, and a multiple-choice exam which covers a range of topics. 2016-FRR Exam is computer-based and can be taken at various test centers throughout the world.

GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q364-Q369):

NEW QUESTION # 364
A large multinational bank is concerned that their duration measures may not be accurate since the yield curve
shifts are not parallel. Which of the following statements would be typically observed regarding variability of
interest rates?

  • A. Short-term rates are more variable than long-term rates.
  • B. Short-term rates are less variable than long-term rates.
  • C. Short-term rates are equally variable as long-term rates.
  • D. Short-term rates and long-term rates always move in opposite directions.

Answer: A


NEW QUESTION # 365
A portfolio manager is interested in computing risk measures for his bond investment portfolio. Which of the
following measures the sensitivity of duration to interest rates?

  • A. Modified duration.
  • B. Yield curve
  • C. Convexity.
  • D. Credit spread.

Answer: C


NEW QUESTION # 366
A bank customer chooses a mortgage with low initial payments and payments that increase over time because
the customer knows that she will have trouble making payments in the early years of the loan. The bank makes
this type of mortgage with the same default assumptions uses for ordinary mortgages, thus underestimating the
risk of default and becoming exposed to:

  • A. Sampling bias
  • B. Adverse selection
  • C. Banking speculation
  • D. Moral hazard

Answer: B


NEW QUESTION # 367
Which of the following assets on the bank's balance sheet has greatest endogenous liquidity risk?

  • A. A 1-week corporate loan with a AAA rated company
  • B. A 10-year U.S treasury bond
  • C. A 3-year subprime mortgage
  • D. A 2-year U.S treasury bond

Answer: C


NEW QUESTION # 368
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. I, II
  • B. I, IV
  • C. I, III
  • D. II, IV

Answer: B

Explanation:
To achieve a profitable commodity carry trade, the strategy should align with the market conditions represented by the shape of the futures curve. The key concepts are contango and backwardation:
* Contango:
* Contango occurs when the futures prices are higher than the spot prices.
* To profit from contango, one should buy short-term futures contracts (which are cheaper) and sell long-term futures contracts (which are more expensive).
* Backwardation:
* Backwardation occurs when the futures prices are lower than the spot prices.
* To profit from backwardation, one should buy long-term futures contracts (which are cheaper) and sell short-term futures contracts (which are more expensive).
Given the statements:
* I. Buy short-term commodity futures and sell longer-dated position when the curve is in contango.
* IV. Buy long-term commodity futures and sell shorter-dated positions when the curve is in backwardation.
Both these strategies align with the correct market conditions for profitable trades.
ReferencesSource: How Finance Works


NEW QUESTION # 369
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