Free GARP FRM-Part-1 Exam Questions
Absolute Free FRM-Part-1 Exam Practice for Comprehensive Preparation
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GARP FRM-Part-1 Exam Questions
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Provided By: GARP
- Exam: FRM Exam Part I
- Certification: GARP Certification
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Total Questions: 533
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Updated On: May 10, 2026
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Rated: 4.9 |
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Online Users: 1066
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Question 1
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Suppose you have a two-security portfolio containing bonds A and B. The book value of bond A is $20 and the market value is $35. The book value of bond B is $40 and the market value is $50. The duration of bond A is 4.7 and the duration of bond B is 5.9. Which of the following amounts is closest to the duration of the portfolio?
Answer: C
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Suppose you have a two-security portfolio containing bonds A and B. The book value of bond A is $20 and the market value is $35. The book value of bond B is $40 and the market value is $50. The duration of bond A is 4.7 and the duration of bond B is 5.9. Which of the following amounts is closest to the duration of the portfolio?
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Question 2
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As a fund manager, Bryan Cole, CFA, is responsible for assessing the risk and return parameters of the portfolios he oversees. Cole is currently considering a portfolio consisting of only two stocks. The first stock, Remba Co., has an expected return of 12 percent and a standard deviation of 16 percent. The second stock, Labs, Inc., has an expected return of 18 percent and a standard deviation of 25 percent. The correlation of returns between the two securities is 0.25.Cole has the option of including a third stock in the portfolio. The third stock, Wimset, Inc., has an expected return of 8% and a standard deviation of 10 percent. If Cole constructed an equally weighted portfolio consisting of all three stocks, the portfolio's expected return would be closest to:
Answer: C
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As a fund manager, Bryan Cole, CFA, is responsible for assessing the risk and return parameters of the portfolios he oversees. Cole is currently considering a portfolio consisting of only two stocks. The first stock, Remba Co., has an expected return of 12 percent and a standard deviation of 16 percent. The second stock, Labs, Inc., has an expected return of 18 percent and a standard deviation of 25 percent. The correlation of returns between the two securities is 0.25.Cole has the option of including a third stock in the portfolio. The third stock, Wimset, Inc., has an expected return of 8% and a standard deviation of 10 percent. If Cole constructed an equally weighted portfolio consisting of all three stocks, the portfolio's expected return would be closest to:
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Question 3
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Bonds rated B have a 25% chance of default in five years. Bonds rated CCC have a 40% chance of default in five years. A portfolio consists of 30% B and 70% CCC-rated bonds. If a randomly selected bond defaults in a five-year period, what is the probability that it was a Brated bond?
Answer: D
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Bonds rated B have a 25% chance of default in five years. Bonds rated CCC have a 40% chance of default in five years. A portfolio consists of 30% B and 70% CCC-rated bonds. If a randomly selected bond defaults in a five-year period, what is the probability that it was a Brated bond?
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Question 4
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The CRO of a bank is evaluating the bank’s practices for the management of risk data. The CRO notes that in characterizing various dimensions of the bank’s data, the Basel Committee has suggested several principles to promote strong and effective risk data aggregation capabilities. Which statement correctly describes a recommendation that the bank should follow in accordance with the Basel Committee’s principles for effective risk data aggregation and risk reporting?
Answer: A
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The CRO of a bank is evaluating the bank’s practices for the management of risk data. The CRO notes that in characterizing various dimensions of the bank’s data, the Basel Committee has suggested several principles to promote strong and effective risk data aggregation capabilities. Which statement correctly describes a recommendation that the bank should follow in accordance with the Basel Committee’s principles for effective risk data aggregation and risk reporting?
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Question 5
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An analyst is regressing fund returns against the return on the Wilshire 5000 to determine whether beta is equal to 1.0. The analyst is trying to determine whether the number of observations should be increased. Which of the following is a reason why the test will have higher power if the number of observations is increased? The:
Answer: A
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An analyst is regressing fund returns against the return on the Wilshire 5000 to determine whether beta is equal to 1.0. The analyst is trying to determine whether the number of observations should be increased. Which of the following is a reason why the test will have higher power if the number of observations is increased? The: