GARP GARP Certifications ICBRR Questions & Answers

• Question 341:

  Which one of the following four variables of the Black-Scholes model is typically NOT known at a point in time?

  A. The underlying relevant exchange rates

  B. The underlying interest rates

  C. The future volatility of the exchange rates

  D. The time to maturity

  Correct Answer: C

• Question 342:

  After entering the securitization business, Delta Bank increases its cash efficiency by selling off the lower risk portions of the portfolio credit risk. This process ___ risk on the residual pieces of the credit portfolio, and as a result it ___ return on equity for the bank.

  A. Decreases; increases;

  B. Increases; increases;

  C. Increases; decreases;

  D. Decreases; increases;

  Correct Answer: B