Pass GARP Financial Risk and Regulation (FRR) Series Exam in First Attempt Guaranteed!

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GARP 2016-FRR (Financial Risk and Regulation) exam is a comprehensive assessment of a candidate's knowledge and understanding of financial risk management and regulation. 2016-FRR exam is designed to test candidates' ability to identify, measure, and manage financial risks within an organization, as well as their understanding of regulatory frameworks and compliance requirements.

GARP 2016-FRR Exam is divided into two parts, Part I and Part II. Part I of the exam covers the fundamental concepts of financial risk management, including the principles of risk management, quantitative analysis, and financial markets. Part II of the exam focuses on the practical application of risk management techniques in real-world scenarios, including case studies and simulations. 2016-FRR exam is designed to test the knowledge and skills of candidates in the areas of risk management and regulation, and to provide them with the necessary tools to succeed in their careers in finance.

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2016-FRR Valid Braindumps Files | 2016-FRR Exam Braindumps

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GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q297-Q302):

NEW QUESTION # 297
Which one of the following four statements about preferred shares is INCORRECT?

A. Preferred shares are subordinated to debt.
B. Preferred shares represent residual of a corporation after its other liabilities have been paid.
C. Preferred shares can be perpetual or have maturities far exceeding debt maturities.
D. Preferred shares refer to a class of securities that is a cross between equity and debt.

Answer: B

Explanation:
Preferred shares have specific characteristics that distinguish them from both common equity and debt:
* Cross between Equity and Debt: Preferred shares have features of both equity and debt. They typically pay fixed dividends (similar to interest payments on debt) but do not have voting rights (similar to debt holders).
* Subordination to Debt: In the event of liquidation, preferred shareholders are paid after debt holders but before common shareholders.
* Perpetual or Long Maturities: Preferred shares can be perpetual, meaning they have no maturity date, or
* have long maturities, often exceeding those of typical corporate bonds.
* Incorrect Statement - Residual Claim: The incorrect statement is that preferred shares represent the residual interest in the corporation after all other liabilities have been paid. In reality, this is the characteristic of common equity. Preferred shares have a higher claim on assets than common shares but are subordinate to all forms of debt.

NEW QUESTION # 298
Beta Insurance Company is only allowed to invest in investment grade bonds. To maximize the interest income, Beta Insurance Company should invest in bonds with which of the following ratings?

A. A
B. AAA
C. B
D. AA

Answer: A

Explanation:
Beta Insurance Company, which can only invest in investment-grade bonds, should invest in bonds with an
"A" rating to maximize interest income. Investment-grade bonds are rated from AAA to BBB. While AAA bonds offer the highest credit quality, they also offer the lowest yield. Bonds rated A offer a good balance between credit quality and higher interest income compared to AAA and AA bonds.

NEW QUESTION # 299
A credit associate extending a loan to an obligor suspects that the obligor may change his behavior after the
loan has been originated. The obligor in this case may use the loan proceeds for purposes not sanctioned by the
lender, thereby increasing the risk of default. Hence, the credit associate must estimate the probability of
default based on the assumptions about the applicability of the following tendency to this lending situation:

A. Short bias
B. Adverse selection
C. Speculation
D. Moral hazard

Answer: D

NEW QUESTION # 300
Normally, commercial banking can be viewed as a fixed income carry trade since

A. Short-term fixed-rate deposits are used to fund short-term floating rate loans.
B. Short-term floating-rate deposits are used to fund short-term floating rate loans.
C. Short-term fixed rate deposits are used to fund long-term floating rate loans.
D. Short-term floating-rate deposits are used to fund long-term fixed rate loans.

Answer: D

NEW QUESTION # 301
When trading exotic options, one needs to consider the following risks:
I. Spot foreign exchange risks
II. Forward foreign exchange risks
III. Plain vanilla options risks
IV. Option-specific risks

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

Answer: D

Explanation:
When trading exotic options, various risks need to be considered. Spot foreign exchange risks (I) involve the risk associated with the current exchange rate fluctuations. Forward foreign exchange risks (II) pertain to the risks related to future exchange rate changes agreed upon in forward contracts. Plain vanilla options risks (III) include the standard risks associated with basic option trading, such as volatility and time decay.
Option-specific risks (IV) refer to the unique risks inherent in the specific exotic option being traded, such as path-dependency, barrier levels, and the complexity of modeling their payoffs. All these risks collectively impact the trading of exotic options.

NEW QUESTION # 302
......

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