TOP 2016-FRR VALID TEST SAMPLE - TRUSTABLE GARP 2016-FRR RELIABLE EXAM BOOK: FINANCIAL RISK AND REGULATION (FRR) SERIES

TOP 2016-FRR Valid Test Sample - Trustable GARP 2016-FRR Reliable Exam Book: Financial Risk and Regulation (FRR) Series

TOP 2016-FRR Valid Test Sample - Trustable GARP 2016-FRR Reliable Exam Book: Financial Risk and Regulation (FRR) Series

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Tags: 2016-FRR Valid Test Sample, 2016-FRR Reliable Exam Book, 2016-FRR Exam Preparation, 2016-FRR Exam Labs, New 2016-FRR Exam Online

The 2016-FRR exam requires the candidates to have thorough understanding on the syllabus contents as well as practical exposure of various concepts of certification. Obviously such a syllabus demands comprehensive studies and experience. If you are lack of these skills, you should find our 2016-FRR study questions to help you equip yourself well. As long as you study with our 2016-FRR practice engine, you will find they can help you get the best percentage on your way to success.

Our experts have prepared GARP Financial Risk and Regulation (FRR) Series dumps questions that will eliminate your chances of failing the exam.​​​​​​ We are conscious of the fact that most of the candidates have a tight schedule which makes it tough to prepare for the Financial Risk and Regulation (FRR) Series exam preparation. CertkingdomPDF provides you 2016-FRR Exam Questions in 3 different formats to open up your study options and suit your preparation tempo.

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2016-FRR Reliable Exam Book, 2016-FRR Exam Preparation

The Financial Risk and Regulation (FRR) Series (2016-FRR) certification is the way to go in the modern GARP era. Success in the 2016-FRR exam of this certification plays an essential role in an individual's future growth. Nowadays, almost every tech aspirant is taking the test to get GARP certification and find well-paying jobs or promotions. But the main issue that most of the candidates face is not finding updated GARP 2016-FRR Practice Questions to prepare successfully for the GARP 2016-FRR certification exam in a short time.

GARP Financial Risk and Regulation (FRR) Series Sample Questions (Q110-Q115):

NEW QUESTION # 110
Bank Omega is using futures contracts on a well capitalized exchange to hedge its market risk exposure.
Which of the following could be reasons that expose the bank to liquidity risk?
I. The bank may not be able to unwind the futures contracts before expiration.
II. Prices may move such that a loss results on the hedge.
III. Since futures require margins which are settled every day, the bank could find itself scrambling for funds.
IV. Exchange margin requirements could change unexpectedly.

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

Answer: B

Explanation:
When a bank uses futures contracts on a well-capitalized exchange to hedge its market risk exposure, it can still be exposed to liquidity risks due to several reasons:
I: The bank may not be able to unwind the futures contracts before expiration: This can happen if there is a lack of market participants willing to take the opposite position, making it difficult to close out the position.
II: Prices may move such that a loss results on the hedge: Although this is a risk related to the performance of the hedge, it is not directly related to liquidity risk but more to market risk.
III: Since futures require margins which are settled every day, the bank could find itself scrambling for funds:
Futures contracts require daily settlement of gains and losses (mark-to-market), which means the bank must have sufficient liquidity to cover margin calls, potentially causing liquidity strain if large movements in the futures prices occur.
IV: Exchange margin requirements could change unexpectedly: If the exchange increases margin requirements, the bank would need to post additional collateral, which could strain its liquidity if it does not have sufficient liquid assets readily available.
References: The verified details are aligned with the context given in "How Finance Works" regarding the liquidity risks associated with futures contracts.


NEW QUESTION # 111
Which of the following about the ratios between various Tiers of capital is not a requirement of the Basel
Committee?

  • A. Upper Tier 2 capital may only equal 30% of core capital.
  • B. Lower Tier 2 capital may only equal 50% of core capital.
  • C. Tier 2 capital cannot exceed 50% of the bank's total regulatory capital.
  • D. Innovative instruments in Tier 1 are limited to a maximum of 15% of Tier 1 capital.

Answer: D


NEW QUESTION # 112
What is the explanation offered by the liquidity preference theory for the upward sloping yield curve shape?

  • A. The long term rates must rise enough to get some borrowers to borrow short-term and some lenders to
    lend long-term.
  • B. The short term rates must fall enough to get some borrowers to borrow long-term and some lenders to
    lend short-term.
  • C. The short term rates must rise enough to get some borrowers to borrow short-term and some lenders to
    lend long-term.
  • D. The long term rates must rise enough to get some borrowers to borrow long-term and some lenders to
    lend short-term.

Answer: A


NEW QUESTION # 113
Which one of the following four statements about equity indices is INCORRECT?

  • A. Capitalization-weighted equity indices are not generally considered better to track the performance of an overall market.
  • B. Price-weighted equity indices give greater weight to shares trading at high prices.
  • C. Equity indices are numerical calculations that reflect the performance of hypothetical equity portfolios.
  • D. Equity indices do not trade in cash form, rather, they are meant to track the overall performance of an equity market.

Answer: A

Explanation:
* Equity indices are numerical calculations that reflect the performance of hypothetical equity portfolios.
* They are designed to track the overall performance of an equity market and do not trade in cash form.
* Capitalization-weighted indices, which weight stocks by their market capitalization, are generally considered effective in tracking the performance of the overall market. Therefore, the statement that they are not generally considered better is incorrect.
* Price-weighted indices give greater weight to shares trading at high prices, reflecting their price movements more heavily in the index.


NEW QUESTION # 114
In early March, an energy trader takes a long position in natural gas futures for delivery in June, and hedges
this exposure by taking a position in futures for July delivery. These trades were executed on the expectation
that over time, the relative prices of the June and July contracts will come into alignment, the movement in
these two contracts will largely mirror each other, and as a result of this, the net exposure is minimized and the
position is protected against absolute price movements. However, if the two relative prices do not come into
alignment with each other due to the scarcity of any of the two traded contracts in the futures market, the
trader is likely to become exposed to the

  • A. Calendar spreads basis
  • B. Product basis
  • C. Location basis
  • D. Quality basis

Answer: A


NEW QUESTION # 115
......

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