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You should keep in mind to pass the 2016-FRR certification exam is not an easy task. It is a challenging job. If you want to pass the 2016-FRR exam then you have to put in some extra effort, time, and investment then you will be confident to pass the Financial Risk and Regulation (FRR) Series (2016-FRR) exam. With the complete and comprehensive 2016-FRR exam dumps preparation you can pass the Financial Risk and Regulation (FRR) Series (2016-FRR) exam with good scores. The Itexamguide 2016-FRR Questions can be helpful in this regard. You must try this.

GARP 2016-FRR Certification Exam is a comprehensive exam that requires a strong understanding of financial risk management and regulation. 2016-FRR exam is designed for professionals who work in a variety of industries, including banking, insurance, investment management, and consulting. 2016-FRR exam is divided into two parts, with Part I covering the fundamentals of risk management and regulation, and Part II focusing on advanced topics in risk management and regulation.

GARP 2016-FRR (Financial Risk and Regulation) certification exam is a globally recognized certification program offered by the Global Association of Risk Professionals (GARP). Financial Risk and Regulation (FRR) Series certification is designed for professionals who work in financial risk management and regulation, providing them with the knowledge and skills needed to succeed in their roles. The GARP FRR certification exam covers a wide range of topics, including risk management frameworks, regulatory requirements, and financial instruments.

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GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q274-Q279):

NEW QUESTION # 274
Which one of the following four statements about preferred shares is INCORRECT?

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

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 # 275
According to a Moody's study, the most important drivers of the loss given default historically have been all of the following EXCEPT:
I. Debt type and seniority
II. Macroeconomic environment
III. Obligor asset type
IV. Recourse

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

Answer: A

Explanation:
* Key Drivers of Loss Given Default: According to Moody's study, the most important drivers of loss given default (LGD) historically have been debt type and seniority, and the macroeconomic environment. These factors directly impact the severity of losses in the event of default by determining the priority of debt repayments and the overall economic conditions affecting the obligor's ability to recover.
* Exclusions: The asset type of the obligor and recourse are not considered primary drivers of LGD in Moody's historical analysis. While they can influence the recovery process, they do not hold the same level of importance as the debt structure and economic conditions.

NEW QUESTION # 276
Why do regulatory standards impose formulaic capital calculations for all of the banks activities?
I). If the banks use different models it is difficult for a regulator to compare results across banks.
II). By imposing standardized calculations regulators can make sure that banks are not missing key risks in their calculations.
III). By imposing standardized calculations regulators can make sure that banks do not use capital calculations to game the banking regulation system.

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

Answer: C

Explanation:
Regulatory standards impose formulaic capital calculations for all of the bank's activities to ensure:
* Comparability Across Banks: Different models used by banks would make it difficult for regulators to compare results across banks.
* Comprehensive Risk Assessment: Standardized calculations help ensure that banks are not missing key risks in their calculations.
* Avoiding Gaming of the System: Standardized calculations prevent banks from using capital calculations to game the banking regulation system, ensuring consistency and fairness.
References
Source: How Finance Works

NEW QUESTION # 277
Which of the following statements represents a methodological difference between variance-covariance and
full revaluation methods?

A. Variance-covariance approach uses only historic data to compute the covariance matrix.
B. Variance-covariance approach prices positions more accurately than the full revaluation approach.
C. Variance-covariance approach computes the VAR for each position separately, while the full revaluation
method computes the VAR on a portfolio basis.
D. Variance-covariance approach provides computational advantages over the full revaluation approach.

Answer: D

NEW QUESTION # 278
Which one of the following four statements regarding counterparty credit risk is INCORRECT?

A. Dynamic collateral provisions often increase counterparty risk considerably.
B. The exposure at default is variable due to fluctuations in swap valuations.
C. The exposure at default can be negatively correlated to probability of default.
D. Counterparty credit risk refers to the inability to realize gains in a contract with a counterparty due to its default.

Answer: A

Explanation:
* Counterparty credit risk refers to the risk that the counterparty to a financial contract will default before the final settlement of the contract's cash flows, resulting in a financial loss. This is correctly stated in option A.
* The exposure at default (EAD) is indeed variable due to fluctuations in the underlying valuations, such as swaps, as mentioned in option B.
* The EAD can be negatively correlated with the probability of default (PD) because as the credit quality of a counterparty deteriorates, their exposure may also decline, correctly stated in option C.
* However, dynamic collateral provisions are typically designed to reduce counterparty risk by adjusting collateral requirements based on changes in exposure and credit quality, not to increase it. Therefore, option D is incorrect.
References:
* How Finance Works: "Counterparty credit risk and its management through collateral provisions is a critical aspect of financial risk management."

NEW QUESTION # 279
......

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