Garp spoto sure Pass Exam 2016-frr Pdf by Selena q137 vce pdf

Page: 16 / 25

Exam Name:	Financial Risk and Regulation (FRR) Series
Exam Code:	2016-FRR Dumps
Vendor:	GARP	Certification:	Financial Risk and Regulation
Questions:	342 Q&A's	Shared By:	selena

Question 64

Alpha Bank determined that Delta Industrial Machinery Corporation has 2% change of default on a one-year no-payment of USD $1 million, including interest and principal repayment. The bank charges 3% interest rate spread to firms in the machinery industry, and the risk-free interest rate is 6%. Alpha Bank receives both interest and principal payments once at the end the year. Delta can only default at the end of the year. If Delta defaults, the bank expects to lose 50% of its promised payment. Hence, the loss rate in this case will be

Options:

10%

Discussion

Question 65

What is the explanation offered by the liquidity preference theory for the upward sloping yield curve shape?

Options:

The long term rates must rise enough to get some borrowers to borrow short-term and some lenders to lend long-term.

The long term rates must rise enough to get some borrowers to borrow long-term and some lenders to lend short-term.

The short term rates must rise enough to get some borrowers to borrow short-term and some lenders to lend long-term.

The short term rates must fall enough to get some borrowers to borrow long-term and some lenders to lend short-term.

Discussion

Question 66

Which one of the following four options does NOT represent a benefit of compensating balances to the bank?

Options:

Compensating balances allow the bank to net some of the exposure they may have in case of default, by taking funds from these specific deposit account one the borrower defaults.

Since the compensating balances cannot be withdrawn at short notice, if at all, they are not considered transaction accounts and are able to provide a stable funding to the bank, reducing its reliance on more volatile external inter-bank based funding sources.

Compensation balances influence the expected loss rate of the bank given the default obligor and improve capital structure by controlling obligor type and avoiding payment delays.

Since the compensating balances reduce the next amount lent to the borrower, the earned return on the loan is increased, further widening the bank's interest rate margin and profitability.

Discussion

Sam

Can I get help from these dumps and their support team for preparing my exam?

Audrey (not set)

Definitely, you won't regret it. They've helped so many people pass their exams and I'm sure they'll help you too. Good luck with your studies!

Madeleine

Passed my exam with my dream score…. Guys do give these dumps a try. They are authentic.

Ziggy (not set)

That's really impressive. I think I might give Cramkey Dumps a try for my next certification exam.

Annabel

I recently used them for my exam and I passed it with excellent score. I am impressed.

Amirah (not set)

I passed too. The questions I saw in the actual exam were exactly the same as the ones in the Cramkey Dumps. I was able to answer the questions confidently because I had already seen and studied them.

Ayesha

They are study materials that are designed to help students prepare for exams and certification tests. They are basically a collection of questions and answers that are likely to appear on the test.

Ayden (not set)

That sounds interesting. Why are they useful? Planning this week, hopefully help me. Can you give me PDF if you have ?

Question 67

Except for the credit quality of the Credit Default Swap protection seller, the following relationship correctly approximates the yield on a risk-free instrument:

Options:

Bond + CDS

Bond + CDS + Market Spread

Bond - CDS

Bond - CDS - Market spread