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GARP 2016-FRR Exam Dumps - Actual Questions Answers

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GARP 2016-FRR Questions Answers

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2016-FRR Questions and Answers

Question # 1

When the cost of gold is $1,100 per bullion and the 3-month forward contract trades at $900, a commodity trader seeks out arbitrage opportunities in this relationship. To capitalize on any arbitrage opportunities, the trader could implement which one of the following four strategies?

A.

Short-sell physical gold and take a long position in the futures contract

B.

Take a long position in physical gold and short-sell the futures contract

C.

Short-sell both physical gold and futures contract

D.

Take long positions in both physical gold and futures contract

Question # 2

A risk associate evaluating his current portfolio of assets and liabilities wants to determine how sensitive this portfolio is to changes in interest rates. Which one of the following four metrics is typically used for this purpose?

A.

Modified duration

B.

Duration of default

C.

Effective duration

D.

Macaulay duration

Question # 3

An asset and liability manager for a large financial institution has to recognize that retail products ___ include embedded options, which are often not rationally exercised, while wholesale products ___ carry penalties for repayment or include rights to terminate wholesale contracts on very different terms than are common in retail products.

A.

Frequently; typically

B.

Hardly ever; typically

C.

Frequently; rarely

D.

Hardly ever; rarely

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