GARP ICBRR Actual Free Exam Questions & Community Discussion

Exam Code/Number: ICBRR
Exam Name/Title: International Certificate in Banking Risk and Regulation (ICBRR)
Certification Provider: GARP
Corresponding Certification: GARP Certification

Exam Questions: 342
Updated On: May 30, 2026

Question #19

A credit analyst wants to determine if her bank is taking too much credit risk. Which one of the following four strategies will typically provide the most convenient approach to quantify the credit risk exposure for the bank?

A. Analyzing distribution of bank's credit losses and mapping credit risks at various statistical levels

B. Assessing aggregate exposure at default at various time points and at various confidence levels

C. Using stress testing techniques to forecast underlying macroeconomic factors and bank's idiosyncratic risks

D. Simplifying individual credit exposures so that they can be combined into a simplified expression of portfolio risk for the bank

Discussion 0

Correct Answer: B Vote an answer

Question #20

An asset manager just bought a coupon paying bond with principal value $100,000 for $87,000 with a current yield of 4.7%. He assumes that if the yields change to 5.7% the price of the bond would be $84,500. Based on this assumption what is the modified duration of the bond?

A. 2.88.

B. 97.12.

C. 2,507.

D. 2.97.

Discussion 0

Correct Answer: A Vote an answer

Question #21

Which one of the four following statements about a minimal loss threshold in operational loss data collection is incorrect?

A. A company can have differing operational loss data collection and reporting thresholds for different departments.

B. The operational loss data collection program has to capture all losses regardless of their size.

C. The operational loss data collection program must include all material losses that are above minimal gross loss threshold.

D. Setting an operational loss data collection threshold depends on the risk appetite of the firm and regulatory requirements it needs to meet.

Discussion 0

Correct Answer: B Vote an answer

Question #22

Which one of the following four attributes would likely help a trader using exchange-traded options to establish a leveraged position?

A. Higher degrees of exposure at less cash cost

B. Option positions have the same cash risks as a margined short futures purchase.

C. Option positions have the same credit risks as a margined long forward.

D. Unlimited losses for long option positions

Discussion 0

Correct Answer: A Vote an answer

Question #23

The retail banking business of BankGamma has an expected P & L of $50 million and a VaR of $100 million. The bank seeks to diversify its revenue, and is considering the opportunity to acquire a credit card business with an expected P & L of $50 million and a VaR of $150 million. What will be the overall RAROC if the bank acquires the new business?

A. 58%.

B. 50%.

C. 33.3%.

D. 72%.

Discussion 0

Correct Answer: A Vote an answer

Question #24

To estimate the forward price of oil, a commodity trader would most likely use the following
pricing relationship:

A. Oil forward price = Expected future oil price +- storage cost + Oil market risk premium

B. Oil forward price = Expected future oil price +- Oil storage cost + (1 + Oil market risk premium)

C. Oil forward price = Expected future oil price +- Oil market risk premium

D. Oil forward price = Expected future oil price +- Oil storage cost + (1 - Oil market risk premium)

Discussion 0

Correct Answer: C Vote an answer

Question #25

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

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

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

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

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

Discussion 0

Correct Answer: C Vote an answer

Question #26

A customer asks a broker employed by AlphaBank to buy Eureka Corporation bonds for her account. While this trade was executed correctly and the bonds were bought, the trade was mistakenly accounted for as a sell order. If the price of Eureka Corporation bonds goes up, this trade would result in a significantly larger loss than if the market had remained stable. However, if the market drops, the customer will benefit from the incorrect accounting and gain from this trade. This trading scenario can serve as an example that

A. Strategic risk in this transaction can magnify operational risk.

B. Liquidity risk in this transaction can magnify operational risk.

C. Credit risk in this transaction can magnify operational risk.

D. Market risk in this transaction can magnify operational risk.

Discussion 0

Correct Answer: D Vote an answer

Question #27

The skewness of ABC company's stock returns equal -1.5. What is the correct interpretation of this?

A. It indicates lower probability of extreme negative events compared to the normal distribution.

B. It indicates higher relative probability of extreme events than non-extreme events compared to estimates from a normal distribution.

C. It indicates that the returns are indeed normally distributed.

D. It indicates higher relative probability of negative returns compared to estimates derived from a normal distribution.

Discussion 0

Correct Answer: D Vote an answer

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