Online Access Free 2016-FRR Exam Questions

Suppose that a regulator deems all corporate debt to have the same risk level. Which of the following behavior of banks would be an example of regulatory arbitrage?

• A.Banks shift their exposure to more risky corporate debt.
• B.Banks decrease their exposure to corporate debt.
• C.Banks increase their exposure to corporate debt.
• D.Banks shift their exposure to less risky corporate debt.

SigmaBank has many branches that offer the same products and services. Which one of the four following statement presents an advantage of using RCSA questionnaire approach in the SigmaBank's operational risk framework?

• A.The results can be collected electronically and the responses compared to identify themes, trends and areas of potential control weakness or elevated risk.
• B.It provides a forum for an in-depth discussion of the operational risks in the firm.
• C.The questionnaires are usually sent to specific nominated parties for completion.
• D.This approach ensures that there has been full participation in the scoring, rather than a single view.

A trader attempts to hold long positions when markets are rising and hold short positions when markets are falling. Which one of the following four trading styles is she likely to use?

• A.Technical trading
• B.Market timing trading
• C.Black box trading
• D.Contrarian trading

Most loans and deposits in the interbank market have a maturity of:

• A.More than 5 years but less than 10 years
• B.More than 10 years
• C.More than 3 years but less than 5 years
• D.Less than one year

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 provides computational advantages over the full revaluation approach.
• D.Variance-covariance approach computes the VAR for each position separately, while the full revaluation method computes the VAR on a portfolio basis.