Which one of the following four parameters is NOT a required input in the Black-Scholes model to price a foreign exchange option?
A. Underlying exchange rates
B. Underlying interest rates
C. Discrete future stock prices
D. Option exercise price
Which one of the following four global markets for financial assets or instruments is widely believed to be the most liquid?
A. Equity market.
B. Foreign exchange market.
C. Fixed income market
D. Commodities market
What is generally true of the relationship between a bond's yield and it's time to maturity when the yield curve is upward sloping?
A. The longer the time to maturity of the bond, the lower its yield.
B. The longer the time to maturity of the bond, the higher its yield.
C. The shorter the time to maturity of the bond, the higher its yield.
D. There is no relationship between the two
Which one of the four following statements regarding foreign exchange (FX) swap transactions is INCORRECT?
A. FX swap is a common short-term transaction.
B. FX swap is normally used for hedging various currency positions.
C. FX swap generates more exchange rate risk than simple forward transactions.
D. FX swap is generally used to for funding foreign currency balances and currency speculation.
All of the following performance statistics typically benefit country's creditworthiness EXCEPT:
A. Low unemployment
B. Low inflation
C. High degrees of investment
D. Low degrees of savings
As Japan ___ its budget deficits and ___ its dependence on debt, the Japanese currency, JPY, would ___ in value against other currencies.
A. Reduces, reduces, appreciate
B. Reduces, reduces, depreciate
C. Increases, reduces, appreciate
D. Reduces, increases, depreciate
An asset manager for a large mutual fund is considering forward exchange positions traded in a clearinghouse system and needs to mitigate the risks created as a result of this operation. Which of the following risks will be created as a result of the forward exchange transaction?
A. Exchange rate risk
B. Exchange rate and interest rate risk
C. Credit risk
D. Exchange rate and credit risk
The potential failure of a manufacturer to honor a warranty might be called ____, whereas the potential failure of a borrower to fulfill its payment requirements, which include both the repayment of the amount borrowed, the principal and the contractual interest payments, would be called ___.
A. Credit risk; market risk
B. Market risk; credit risk
C. Credit risk; performance risk
D. Performance risk; credit risk
Except for the credit quality of the Credit Default Swap protection seller, the following relationship correctly approximates the yield on a risk-free instrument:
A. Bond + CDS
B. Bond + CDS + Market Spread
C. Bond - CDS
D. Bond - CDS - Market spread
Which one of the following four models is typically used to grade the obligations of small- and medium-size enterprises?
A. Causal models
B. Historical frequency models
C. Credit scoring models
D. Credit rating models
Nowadays, the certification exams become more and more important and required by more and more enterprises when applying for a job. But how to prepare for the exam effectively? How to prepare for the exam in a short time with less efforts? How to get a ideal result and how to find the most reliable resources? Here on Vcedump.com, you will find all the answers. Vcedump.com provide not only GARP exam questions, answers and explanations but also complete assistance on your exam preparation and certification application. If you are confused on your 2016-FRR exam preparations and GARP certification application, do not hesitate to visit our Vcedump.com to find your solutions here.