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| Certification Vendor: | GARP (Global Association of Risk Professionals) |
| Exam Name: | GARP International Certificate in Banking Risk and Regulation (ICBRR / FRR) |
| Exam Number: | ICBRR (replaced by 2016-FRR) |
| Exam Format: | Multiple-choice questions, Computer-based test (CBT), Online proctored |
| Exam Price: | $350–$500 USD |
| Related Certifications: | FFR (Foundations of Financial Risk) FRM (Financial Risk Manager) |
| Passing Score: | 67.5% (54/80) |
| Available Languages: | English, Chinese |
| Real Exam Qty: | 80–120 |
| Certificate Validity Period: | Lifetime |
| Exam Duration: | 120–175 |
| Recommended Training: | Official FRR Study Materials |
| Exam Registration: | GARP Official Registration Pearson VUE Scheduling |
| Sample Questions: | GARP ICBRR Sample Questions |
| Exam Way: | Onsite at Pearson VUE centers or online proctored via OnVUE |
| Pre Condition: | No formal prerequisites; open to all finance and banking professionals |
| Official Syllabus URL: | https://www.garp.org/courses/financial-risk-and-regulation |
| Section | Weight | Objectives |
|---|---|---|
| Credit Risk Management | 25% | - Credit risk measurement - Counterparty credit risk - Credit risk mitigation - Capital requirements for credit risk |
| Market Risk Management | 20% | - Equity & commodity risk - Foreign exchange risk - Interest rate risk - VaR and stress testing |
| Liquidity & ALM | 15% | - Asset & Liability Management - Liquidity risk principles - Funding strategies - Liquidity coverage ratios |
| Banking Industry & Regulatory Framework | 15% | - Basel Accords overview - Banking business models - Risk-based supervision |
| Regulatory Capital & Governance | 10% | - Risk governance & internal controls - Capital adequacy framework - ICAAP & SREP |
| Operational Risk Management | 15% | - Business continuity - Operational risk identification - Risk measurement & control - AML & KYC requirements |
1. ThetaBank has extended substantial financing to two mortgage companies, which these mortgage lenders use to finance their own lending. Individually, each of the mortgage companies have an exposure at default (EAD) of $20 million, with a loss given default (LGD) of 100%, and a probability of default of 10%. ThetaBank's risk department predicts the joint probability of default at 5%. If the default risk of these mortgage companies were modeled as independent risks, the actual probability would be underestimated by:
A) 3%
B) 4%
C) 2%
D) 1%
2. GammaBank estimates its monthly portfolio volatility at 5%.The portfolio's annual volatility is closest to which of the following?
A) 30%
B) 8%
C) 17%
D) 35%
3. Which one of the following four statements about the "market-maker" trading strategy is INCORRECT?
A) A market maker that attracts buy and sell orders can make a profit from the spread quoted between the buy and sell price.
B) This risk in this strategy is that traders have to take positions that may quickly incur a loss.
C) A market maker can benefit from the market information she gets from the trades she is asked to execute.
D) This strategy is independent of market liquidity and number of other market makers.
4. A bank has a large number of auto loans and would prefer to sell them to raise cash for more funding. However, selling individual auto loans is difficult. What could the bank do?
A) Merge with another bank.
B) Obtain a stronger credit rating so that the bank could borrow at a cheaper rate.
C) Package the loans into a securitized vehicle and sell the low risk portion of the portfolio.
D) Set up a marketing team to sell individual loans to investors.
5. US based Alpha Bank holds European corporate bonds and US inflation-indexed Treasury notes in its investment portfolio. This investment portfolio is not exposed to changes in which of the following?
A) Foreign exchange rates
B) Credit spread on the corporate bonds
C) Equity values
D) European interest rates
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: C | Question # 3 Answer: D | Question # 4 Answer: C | Question # 5 Answer: C |
| Certification Vendor: | GARP (Global Association of Risk Professionals) |
| Exam Name: | GARP International Certificate in Banking Risk and Regulation (ICBRR / FRR) |
| Exam Number: | ICBRR (replaced by 2016-FRR) |
| Exam Format: | Multiple-choice questions, Computer-based test (CBT), Online proctored |
| Exam Price: | $350–$500 USD |
| Related Certifications: | FFR (Foundations of Financial Risk) FRM (Financial Risk Manager) |
| Passing Score: | 67.5% (54/80) |
| Available Languages: | English, Chinese |
| Real Exam Qty: | 80–120 |
| Certificate Validity Period: | Lifetime |
| Exam Duration: | 120–175 |
| Recommended Training: | Official FRR Study Materials |
| Exam Registration: | GARP Official Registration Pearson VUE Scheduling |
| Sample Questions: | GARP ICBRR Sample Questions |
| Exam Way: | Onsite at Pearson VUE centers or online proctored via OnVUE |
| Pre Condition: | No formal prerequisites; open to all finance and banking professionals |
| Official Syllabus URL: | https://www.garp.org/courses/financial-risk-and-regulation |
| Section | Weight | Objectives |
|---|---|---|
| Credit Risk Management | 25% | - Credit risk measurement - Counterparty credit risk - Credit risk mitigation - Capital requirements for credit risk |
| Market Risk Management | 20% | - Equity & commodity risk - Foreign exchange risk - Interest rate risk - VaR and stress testing |
| Liquidity & ALM | 15% | - Asset & Liability Management - Liquidity risk principles - Funding strategies - Liquidity coverage ratios |
| Banking Industry & Regulatory Framework | 15% | - Basel Accords overview - Banking business models - Risk-based supervision |
| Regulatory Capital & Governance | 10% | - Risk governance & internal controls - Capital adequacy framework - ICAAP & SREP |
| Operational Risk Management | 15% | - Business continuity - Operational risk identification - Risk measurement & control - AML & KYC requirements |
1. ThetaBank has extended substantial financing to two mortgage companies, which these mortgage lenders use to finance their own lending. Individually, each of the mortgage companies have an exposure at default (EAD) of $20 million, with a loss given default (LGD) of 100%, and a probability of default of 10%. ThetaBank's risk department predicts the joint probability of default at 5%. If the default risk of these mortgage companies were modeled as independent risks, the actual probability would be underestimated by:
A) 3%
B) 4%
C) 2%
D) 1%
2. GammaBank estimates its monthly portfolio volatility at 5%.The portfolio's annual volatility is closest to which of the following?
A) 30%
B) 8%
C) 17%
D) 35%
3. Which one of the following four statements about the "market-maker" trading strategy is INCORRECT?
A) A market maker that attracts buy and sell orders can make a profit from the spread quoted between the buy and sell price.
B) This risk in this strategy is that traders have to take positions that may quickly incur a loss.
C) A market maker can benefit from the market information she gets from the trades she is asked to execute.
D) This strategy is independent of market liquidity and number of other market makers.
4. A bank has a large number of auto loans and would prefer to sell them to raise cash for more funding. However, selling individual auto loans is difficult. What could the bank do?
A) Merge with another bank.
B) Obtain a stronger credit rating so that the bank could borrow at a cheaper rate.
C) Package the loans into a securitized vehicle and sell the low risk portion of the portfolio.
D) Set up a marketing team to sell individual loans to investors.
5. US based Alpha Bank holds European corporate bonds and US inflation-indexed Treasury notes in its investment portfolio. This investment portfolio is not exposed to changes in which of the following?
A) Foreign exchange rates
B) Credit spread on the corporate bonds
C) Equity values
D) European interest rates
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: C | Question # 3 Answer: D | Question # 4 Answer: C | Question # 5 Answer: C |
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