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GARP ICBRR Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Topic 1: Bank Governance and Risk Oversight | - Internal Controls and Compliance - Risk Governance Structures - Risk Appetite Framework |
| Topic 2: Regulatory Framework for Banking | - Basel Accords (Basel I, II, III Overview) - Capital Adequacy Requirements - Supervisory Review Process |
| Topic 3: Credit Risk Management | - Counterparty Risk - Credit Exposure Measurement - Credit Risk Models and Rating Systems |
| Topic 4: Operational Risk | - Operational Risk Types and Events - Loss Distribution Approach - Risk Control and Mitigation |
| Topic 5: Market Risk Management | - Value at Risk (VaR) Concepts - Trading Book Risk - Interest Rate Risk |
GARP International Certificate in Banking Risk and Regulation (ICBRR) Sample Questions:
Which one of the four following statements regarding foreign exchange (FX) swap transactions is INCORRECT?
- A. FX swap is normally used for hedging various currency positions.
- B. FX swap is generally used to for funding foreign currency balances and currency speculation.
- C. FX swap generates more exchange rate risk than simple forward transactions.
- D. FX swap is a common short-term transaction.
Correct Answer: C 🗳️
If a bank is long (GBP)500 million pounds, short (GBP)300 million in delta-equivalent pound options, and long (GBP)100 million in pound-denominated stocks, what is the amount of pound exposure that would be shown in the aggregated risk reports?
- A. (GBP)300 million pounds
- B. (GBP)800 million pounds
- C. (GBP)900 million pounds
- D. (GBP)500 million pounds
Correct Answer: A 🗳️
Arnold Wu owns a floating rate bond. He is concerned that the rates may fall in the future decreasing his payment amount. Which of the following instruments should he buy to hedge against the fall in interest rates?
- A. Interest rate cap
- B. Interest rate floor
- C. Interest rate swap that receives floating and pays fixed
- D. Index amortizing swap
Correct Answer: B 🗳️
Which one of the following four statements correctly defines a typical carry trade?
- A. A bank borrows funds in a low-interest currency, accumulates reserves, and lends in another low-interest currency.
- B. A bank borrows funds in a low-interest currency and places the funds on deposit in a high-interest currency.
- C. A bank borrows funds in a high-interest currency and places the funds in a long-term low volatility investment vehicle.
- D. A bank borrows funds in a high-interest currency and invests the funds into high-yield emerging market debt.
Correct Answer: B 🗳️
Bank customers traditionally trade commodity futures with banks in order to achieve which of the following goals?
I. To express their own price views
II. To reverse undesired short-term exposure created from fixed commodity sales
III.
To reach short-term budgetary targets
- A. I
- B. I, II, III
- C. I, III
- D. II
Correct Answer: B 🗳️
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