{"id":101718,"date":"2025-05-22T01:59:54","date_gmt":"2025-05-22T01:59:54","guid":{"rendered":"https:\/\/www.dumpsbase.com\/freedumps\/?p=101718"},"modified":"2025-09-08T07:48:19","modified_gmt":"2025-09-08T07:48:19","slug":"2016-frr-dumps-updated-to-v9-02-as-the-latest-study-materials-for-learning-read-2016-frr-free-dumps-part-1-q1-q40-to-verify-the-financial-risk-and-regulation-frr-dumps","status":"publish","type":"post","link":"https:\/\/www.dumpsbase.com\/freedumps\/2016-frr-dumps-updated-to-v9-02-as-the-latest-study-materials-for-learning-read-2016-frr-free-dumps-part-1-q1-q40-to-verify-the-financial-risk-and-regulation-frr-dumps.html","title":{"rendered":"2016-FRR Dumps Updated to V9.02 as the Latest Study Materials for Learning: Read 2016-FRR Free Dumps (Part 1, Q1-Q40) to Verify the Financial Risk and Regulation (FRR) Dumps"},"content":{"rendered":"<p>Download the most updated 2016-FRR dumps from DumpsBase and enhance your learning experience with the latest exam questions and answers. We updated the Financial Risk and Regulation (FRR) 2016-FRR dumps to V9.02, providing 387 exam questions and answers to reflect the real exam format and content, giving you an edge in passing on your first attempt. The 2016-FRR dumps from DumpsBase are updated regularly to align with the most recent exam changes, offering you a reliable and up-to-date learning experience. The 2016-FRR dumps (V9.02) allow you to focus on important areas, manage your time effectively, and pass the Financial Risk and Regulation (FRR) certification exam with a high score. Take advantage of <span class=\"notion-enable-hover\" data-token-index=\"1\">accurate, reliable, and practical 2016-FRR dumps<\/span> to achieve your certification goals. Before downloading the latest study materials, you can check our free dumps to verify the quality. <!-- notionvc: 02e70e50-34c2-4c72-bc0d-cd42f0bb346d --><\/p>\n<h2>Read the <em><span style=\"background-color: #00ffff;\">2016-FRR free dumps (Part 1, Q1-Q40) below<\/span><\/em> first:<\/h2>\n<script>\n\t  window.fbAsyncInit = function() {\n\t    FB.init({\n\t      appId            : '622169541470367',\n\t      autoLogAppEvents : true,\n\t      xfbml            : true,\n\t      version          : 'v3.1'\n\t    });\n\t  };\n\t\n\t  (function(d, s, id){\n\t     var js, fjs = d.getElementsByTagName(s)[0];\n\t     if (d.getElementById(id)) {return;}\n\t     js = d.createElement(s); js.id = id;\n\t     js.src = \"https:\/\/connect.facebook.net\/en_US\/sdk.js\";\n\t     fjs.parentNode.insertBefore(js, fjs);\n\t   }(document, 'script', 'facebook-jssdk'));\n\t<\/script><script type=\"text\/javascript\" >\ndocument.addEventListener(\"DOMContentLoaded\", function(event) { \nif(!window.jQuery) alert(\"The important jQuery library is not properly loaded in your site. Your WordPress theme is probably missing the essential wp_head() call. You can switch to another theme and you will see that the plugin works fine and this notice disappears. If you are still not sure what to do you can contact us for help.\");\n});\n<\/script>  \n  \n<div  id=\"watupro_quiz\" class=\"quiz-area single-page-quiz\">\n<p id=\"submittingExam9990\" style=\"display:none;text-align:center;\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.dumpsbase.com\/freedumps\/wp-content\/plugins\/watupro\/img\/loading.gif\" width=\"16\" height=\"16\"><\/p>\n\n<div class=\"watupro-exam-description\" id=\"description-quiz-9990\"><\/div>\n\n<form action=\"\" method=\"post\" class=\"quiz-form\" id=\"quiz-9990\"  enctype=\"multipart\/form-data\" >\n<div class='watu-question ' id='question-1' style=';'><div id='questionWrap-1'  class='   watupro-question-id-397438'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>1. <\/span>Which one of the following four statements correctly defines credit risk?<\/div><input type='hidden' name='question_id[]' id='qID_1' value='397438' \/><input type='hidden' id='answerType397438' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397438[]' id='answer-id-1544272' class='answer   answerof-397438 ' value='1544272'   \/><label for='answer-id-1544272' id='answer-label-1544272' class=' answer'><span>Credit risk is the risk that complements market and liquidity risks.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397438[]' id='answer-id-1544273' class='answer   answerof-397438 ' value='1544273'   \/><label for='answer-id-1544273' id='answer-label-1544273' class=' answer'><span>Credit risk is a form of performance risk in contractual relationship.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397438[]' id='answer-id-1544274' class='answer   answerof-397438 ' value='1544274'   \/><label for='answer-id-1544274' id='answer-label-1544274' class=' answer'><span>Credit risk is the risk arising from execution of a company's strategy.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397438[]' id='answer-id-1544275' class='answer   answerof-397438 ' value='1544275'   \/><label for='answer-id-1544275' id='answer-label-1544275' class=' answer'><span>Credit risk is the risk that summarizes the exposures a company or firm assumes when it attempts to operate within a given field or industry.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-2' style=';'><div id='questionWrap-2'  class='   watupro-question-id-397439'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>2. <\/span>A credit analyst wants to determine a good pricing strategy to compensate for credit decisions that might have been made incorrectly. When analyzing her credit portfolio, the analyst focuses on the spreads in each loan to determine if they are sufficient to compensate the bank for all of the following costs and risks EXCEPT.<\/div><input type='hidden' name='question_id[]' id='qID_2' value='397439' \/><input type='hidden' id='answerType397439' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397439[]' id='answer-id-1544276' class='answer   answerof-397439 ' value='1544276'   \/><label for='answer-id-1544276' id='answer-label-1544276' class=' answer'><span>The marginal cost of funds provided.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397439[]' id='answer-id-1544277' class='answer   answerof-397439 ' value='1544277'   \/><label for='answer-id-1544277' id='answer-label-1544277' class=' answer'><span>The overhead cost of maintaining the loan and the account.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397439[]' id='answer-id-1544278' class='answer   answerof-397439 ' value='1544278'   \/><label for='answer-id-1544278' id='answer-label-1544278' class=' answer'><span>The inherent risk of lending to this borrower while providing a return on the risk capital used to the support the loan.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397439[]' id='answer-id-1544279' class='answer   answerof-397439 ' value='1544279'   \/><label for='answer-id-1544279' id='answer-label-1544279' class=' answer'><span>The opportunity cost of risk-adjusted marginal cost of capital.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-3' style=';'><div id='questionWrap-3'  class='   watupro-question-id-397440'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>3. <\/span>To estimate the interest charges on the loan, an analyst should use one of the following four formulas:<\/div><input type='hidden' name='question_id[]' id='qID_3' value='397440' \/><input type='hidden' id='answerType397440' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397440[]' id='answer-id-1544280' class='answer   answerof-397440 ' value='1544280'   \/><label for='answer-id-1544280' id='answer-label-1544280' class=' answer'><span>Loan interest = Risk-free rate - Probability of default x Loss given default + Spread<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397440[]' id='answer-id-1544281' class='answer   answerof-397440 ' value='1544281'   \/><label for='answer-id-1544281' id='answer-label-1544281' class=' answer'><span>Loan interest = Risk-free rate + Probability of default x Loss given default + Spread<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397440[]' id='answer-id-1544282' class='answer   answerof-397440 ' value='1544282'   \/><label for='answer-id-1544282' id='answer-label-1544282' class=' answer'><span>Loan interest = Risk-free rate - Probability of default x Loss given default - Spread<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397440[]' id='answer-id-1544283' class='answer   answerof-397440 ' value='1544283'   \/><label for='answer-id-1544283' id='answer-label-1544283' class=' answer'><span>Loan interest = Risk-free rate + Probability of default x Loss given default - Spread<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-4' style=';'><div id='questionWrap-4'  class='   watupro-question-id-397441'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>4. <\/span>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<\/div><input type='hidden' name='question_id[]' id='qID_4' value='397441' \/><input type='hidden' id='answerType397441' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397441[]' id='answer-id-1544284' class='answer   answerof-397441 ' value='1544284'   \/><label for='answer-id-1544284' id='answer-label-1544284' class=' answer'><span>1%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397441[]' id='answer-id-1544285' class='answer   answerof-397441 ' value='1544285'   \/><label for='answer-id-1544285' id='answer-label-1544285' class=' answer'><span>3%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397441[]' id='answer-id-1544286' class='answer   answerof-397441 ' value='1544286'   \/><label for='answer-id-1544286' id='answer-label-1544286' class=' answer'><span>5%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397441[]' id='answer-id-1544287' class='answer   answerof-397441 ' value='1544287'   \/><label for='answer-id-1544287' id='answer-label-1544287' class=' answer'><span>10%<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-5' style=';'><div id='questionWrap-5'  class='   watupro-question-id-397442'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>5. <\/span>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. <br \/>\r<br>What interest rate should Alpha Bank charge on the no-payment loan to Delta Industrial Machinery Corporation?<\/div><input type='hidden' name='question_id[]' id='qID_5' value='397442' \/><input type='hidden' id='answerType397442' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397442[]' id='answer-id-1544288' class='answer   answerof-397442 ' value='1544288'   \/><label for='answer-id-1544288' id='answer-label-1544288' class=' answer'><span>8%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397442[]' id='answer-id-1544289' class='answer   answerof-397442 ' value='1544289'   \/><label for='answer-id-1544289' id='answer-label-1544289' class=' answer'><span>9%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397442[]' id='answer-id-1544290' class='answer   answerof-397442 ' value='1544290'   \/><label for='answer-id-1544290' id='answer-label-1544290' class=' answer'><span>10%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397442[]' id='answer-id-1544291' class='answer   answerof-397442 ' value='1544291'   \/><label for='answer-id-1544291' id='answer-label-1544291' class=' answer'><span>12%<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-6' style=';'><div id='questionWrap-6'  class='   watupro-question-id-397443'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>6. <\/span>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. <br \/>\r<br>What may happen to the Delta's initial credit parameter and the value of its loan if the machinery industry experiences adverse structural changes?<\/div><input type='hidden' name='question_id[]' id='qID_6' value='397443' \/><input type='hidden' id='answerType397443' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397443[]' id='answer-id-1544292' class='answer   answerof-397443 ' value='1544292'   \/><label for='answer-id-1544292' id='answer-label-1544292' class=' answer'><span>Probability of default and loss at default may decrease simultaneously, while duration rises causing the loan value to decrease.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397443[]' id='answer-id-1544293' class='answer   answerof-397443 ' value='1544293'   \/><label for='answer-id-1544293' id='answer-label-1544293' class=' answer'><span>Probability of default and loss at default may decrease simultaneously, while duration falls causing the loan value to decrease.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397443[]' id='answer-id-1544294' class='answer   answerof-397443 ' value='1544294'   \/><label for='answer-id-1544294' id='answer-label-1544294' class=' answer'><span>Probability of default and loss at default may increase simultaneously, while duration rises causing the loan value to decrease.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397443[]' id='answer-id-1544295' class='answer   answerof-397443 ' value='1544295'   \/><label for='answer-id-1544295' id='answer-label-1544295' class=' answer'><span>Probability of default and loss at default may increase simultaneously, while duration falls causing the loan value to decrease.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-7' style=';'><div id='questionWrap-7'  class='   watupro-question-id-397444'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>7. <\/span>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. Six months after Alpha Bank provides USD $1 million loan to the Delta Industrial Machinery <br \/>\r<br>Corporation, a new competitor enters the machinery industry, causing Delta to adjust its prices and mark down the value of its inventory. Hence, the probability of default increases from 2% to 10% and the loss given default increases from 50% to 75%. <br \/>\r<br>If Alpha Bank can reprice the loan, what should the new rate be?<\/div><input type='hidden' name='question_id[]' id='qID_7' value='397444' \/><input type='hidden' id='answerType397444' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397444[]' id='answer-id-1544296' class='answer   answerof-397444 ' value='1544296'   \/><label for='answer-id-1544296' id='answer-label-1544296' class=' answer'><span>10%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397444[]' id='answer-id-1544297' class='answer   answerof-397444 ' value='1544297'   \/><label for='answer-id-1544297' id='answer-label-1544297' class=' answer'><span>13%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397444[]' id='answer-id-1544298' class='answer   answerof-397444 ' value='1544298'   \/><label for='answer-id-1544298' id='answer-label-1544298' class=' answer'><span>16.5%<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397444[]' id='answer-id-1544299' class='answer   answerof-397444 ' value='1544299'   \/><label for='answer-id-1544299' id='answer-label-1544299' class=' answer'><span>20.5%<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-8' style=';'><div id='questionWrap-8'  class='   watupro-question-id-397445'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>8. <\/span>Which one of the following four model types would assign an obligor to an obligor class based on the risk characteristics of the borrower at the time the loan was originated and estimate the default probability based on the past default rate of the members of that particular class?<\/div><input type='hidden' name='question_id[]' id='qID_8' value='397445' \/><input type='hidden' id='answerType397445' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397445[]' id='answer-id-1544300' class='answer   answerof-397445 ' value='1544300'   \/><label for='answer-id-1544300' id='answer-label-1544300' class=' answer'><span>Dynamic models<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397445[]' id='answer-id-1544301' class='answer   answerof-397445 ' value='1544301'   \/><label for='answer-id-1544301' id='answer-label-1544301' class=' answer'><span>Causal models<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397445[]' id='answer-id-1544302' class='answer   answerof-397445 ' value='1544302'   \/><label for='answer-id-1544302' id='answer-label-1544302' class=' answer'><span>Historical frequency models<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397445[]' id='answer-id-1544303' class='answer   answerof-397445 ' value='1544303'   \/><label for='answer-id-1544303' id='answer-label-1544303' class=' answer'><span>Credit rating models<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-9' style=';'><div id='questionWrap-9'  class='   watupro-question-id-397446'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>9. <\/span>Which one of the following four models is typically used to grade the obligations of small- and medium-size enterprises?<\/div><input type='hidden' name='question_id[]' id='qID_9' value='397446' \/><input type='hidden' id='answerType397446' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397446[]' id='answer-id-1544304' class='answer   answerof-397446 ' value='1544304'   \/><label for='answer-id-1544304' id='answer-label-1544304' class=' answer'><span>Causal models<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397446[]' id='answer-id-1544305' class='answer   answerof-397446 ' value='1544305'   \/><label for='answer-id-1544305' id='answer-label-1544305' class=' answer'><span>Historical frequency models<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397446[]' id='answer-id-1544306' class='answer   answerof-397446 ' value='1544306'   \/><label for='answer-id-1544306' id='answer-label-1544306' class=' answer'><span>Credit scoring models<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397446[]' id='answer-id-1544307' class='answer   answerof-397446 ' value='1544307'   \/><label for='answer-id-1544307' id='answer-label-1544307' class=' answer'><span>Credit rating models<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-10' style=';'><div id='questionWrap-10'  class='   watupro-question-id-397447'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>10. <\/span>A credit associate extending a loan to an obligor suspects that the obligor may change his behavior after the loan has been originated. The obligor in this case may use the loan proceeds for purposes not sanctioned by the lender, thereby increasing the risk of default. Hence, the credit associate must estimate the probability of default based on the assumptions about the applicability of the following tendency to this lending situation:<\/div><input type='hidden' name='question_id[]' id='qID_10' value='397447' \/><input type='hidden' id='answerType397447' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397447[]' id='answer-id-1544308' class='answer   answerof-397447 ' value='1544308'   \/><label for='answer-id-1544308' id='answer-label-1544308' class=' answer'><span>Speculation<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397447[]' id='answer-id-1544309' class='answer   answerof-397447 ' value='1544309'   \/><label for='answer-id-1544309' id='answer-label-1544309' class=' answer'><span>Short bias<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397447[]' id='answer-id-1544310' class='answer   answerof-397447 ' value='1544310'   \/><label for='answer-id-1544310' id='answer-label-1544310' class=' answer'><span>Moral hazard<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397447[]' id='answer-id-1544311' class='answer   answerof-397447 ' value='1544311'   \/><label for='answer-id-1544311' id='answer-label-1544311' class=' answer'><span>Adverse selection<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-11' style=';'><div id='questionWrap-11'  class='   watupro-question-id-397448'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>11. <\/span>A bank customer chooses a mortgage with low initial payments and payments that increase over time because the customer knows that she will have trouble making payments in the early years of the loan. The bank makes this type of mortgage with the same default assumptions uses for ordinary mortgages, thus underestimating the risk of default and becoming exposed to:<\/div><input type='hidden' name='question_id[]' id='qID_11' value='397448' \/><input type='hidden' id='answerType397448' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397448[]' id='answer-id-1544312' class='answer   answerof-397448 ' value='1544312'   \/><label for='answer-id-1544312' id='answer-label-1544312' class=' answer'><span>Moral hazard<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397448[]' id='answer-id-1544313' class='answer   answerof-397448 ' value='1544313'   \/><label for='answer-id-1544313' id='answer-label-1544313' class=' answer'><span>Adverse selection<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397448[]' id='answer-id-1544314' class='answer   answerof-397448 ' value='1544314'   \/><label for='answer-id-1544314' id='answer-label-1544314' class=' answer'><span>Banking speculation<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397448[]' id='answer-id-1544315' class='answer   answerof-397448 ' value='1544315'   \/><label for='answer-id-1544315' id='answer-label-1544315' class=' answer'><span>Sampling bias<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-12' style=';'><div id='questionWrap-12'  class='   watupro-question-id-397449'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>12. <\/span>The potential failure of a manufacturer to honor a warranty might be called ____, whereas the <br \/>\r<br>potential failure of a borrower to fulfill its payment requirements, which include both the repayment of the amount borrowed, the principal and the contractual interest payments, would be called ___.<\/div><input type='hidden' name='question_id[]' id='qID_12' value='397449' \/><input type='hidden' id='answerType397449' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397449[]' id='answer-id-1544316' class='answer   answerof-397449 ' value='1544316'   \/><label for='answer-id-1544316' id='answer-label-1544316' class=' answer'><span>Credit risk; market risk<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397449[]' id='answer-id-1544317' class='answer   answerof-397449 ' value='1544317'   \/><label for='answer-id-1544317' id='answer-label-1544317' class=' answer'><span>Market risk; credit risk<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397449[]' id='answer-id-1544318' class='answer   answerof-397449 ' value='1544318'   \/><label for='answer-id-1544318' id='answer-label-1544318' class=' answer'><span>Credit risk; performance risk<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397449[]' id='answer-id-1544319' class='answer   answerof-397449 ' value='1544319'   \/><label for='answer-id-1544319' id='answer-label-1544319' class=' answer'><span>Performance risk; credit risk<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-13' style=';'><div id='questionWrap-13'  class='   watupro-question-id-397450'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>13. <\/span>Which one of the following four options does NOT represent a benefit of compensating balances to the bank?<\/div><input type='hidden' name='question_id[]' id='qID_13' value='397450' \/><input type='hidden' id='answerType397450' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397450[]' id='answer-id-1544320' class='answer   answerof-397450 ' value='1544320'   \/><label for='answer-id-1544320' id='answer-label-1544320' class=' answer'><span>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.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397450[]' id='answer-id-1544321' class='answer   answerof-397450 ' value='1544321'   \/><label for='answer-id-1544321' id='answer-label-1544321' class=' answer'><span>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.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397450[]' id='answer-id-1544322' class='answer   answerof-397450 ' value='1544322'   \/><label for='answer-id-1544322' id='answer-label-1544322' class=' answer'><span>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.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397450[]' id='answer-id-1544323' class='answer   answerof-397450 ' value='1544323'   \/><label for='answer-id-1544323' id='answer-label-1544323' class=' answer'><span>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.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-14' style=';'><div id='questionWrap-14'  class='   watupro-question-id-397451'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>14. <\/span>According to a Moody's study, the most important drivers of the loss given default historically have been all of the following EXCEPT: <br \/>\r<br>I. Debt type and seniority <br \/>\r<br>II. Macroeconomic environment <br \/>\r<br>III. Obligor asset type <br \/>\r<br>IV. Recourse<\/div><input type='hidden' name='question_id[]' id='qID_14' value='397451' \/><input type='hidden' id='answerType397451' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397451[]' id='answer-id-1544324' class='answer   answerof-397451 ' value='1544324'   \/><label for='answer-id-1544324' id='answer-label-1544324' class=' answer'><span>I<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397451[]' id='answer-id-1544325' class='answer   answerof-397451 ' value='1544325'   \/><label for='answer-id-1544325' id='answer-label-1544325' class=' answer'><span>II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397451[]' id='answer-id-1544326' class='answer   answerof-397451 ' value='1544326'   \/><label for='answer-id-1544326' id='answer-label-1544326' class=' answer'><span>I, II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397451[]' id='answer-id-1544327' class='answer   answerof-397451 ' value='1544327'   \/><label for='answer-id-1544327' id='answer-label-1544327' class=' answer'><span>III, IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-15' style=';'><div id='questionWrap-15'  class='   watupro-question-id-397452'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>15. <\/span>A credit rating analyst wants to determine the expected duration of the default time for a new three-year loan, which has a 2% likelihood of defaulting in the first year, a 3% likelihood of defaulting in the second year, and a 5% likelihood of defaulting the third year. <br \/>\r<br>What is the expected duration for this three-year loan?<\/div><input type='hidden' name='question_id[]' id='qID_15' value='397452' \/><input type='hidden' id='answerType397452' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397452[]' id='answer-id-1544328' class='answer   answerof-397452 ' value='1544328'   \/><label for='answer-id-1544328' id='answer-label-1544328' class=' answer'><span>1.5 years<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397452[]' id='answer-id-1544329' class='answer   answerof-397452 ' value='1544329'   \/><label for='answer-id-1544329' id='answer-label-1544329' class=' answer'><span>2.1 years<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397452[]' id='answer-id-1544330' class='answer   answerof-397452 ' value='1544330'   \/><label for='answer-id-1544330' id='answer-label-1544330' class=' answer'><span>2.3 years<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397452[]' id='answer-id-1544331' class='answer   answerof-397452 ' value='1544331'   \/><label for='answer-id-1544331' id='answer-label-1544331' class=' answer'><span>3.7 years<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-16' style=';'><div id='questionWrap-16'  class='   watupro-question-id-397453'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>16. <\/span>Of all the risk factors in loan pricing, which one of the following four choices is likely to be the least significant?<\/div><input type='hidden' name='question_id[]' id='qID_16' value='397453' \/><input type='hidden' id='answerType397453' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397453[]' id='answer-id-1544332' class='answer   answerof-397453 ' value='1544332'   \/><label for='answer-id-1544332' id='answer-label-1544332' class=' answer'><span>Probability of default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397453[]' id='answer-id-1544333' class='answer   answerof-397453 ' value='1544333'   \/><label for='answer-id-1544333' id='answer-label-1544333' class=' answer'><span>Duration of default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397453[]' id='answer-id-1544334' class='answer   answerof-397453 ' value='1544334'   \/><label for='answer-id-1544334' id='answer-label-1544334' class=' answer'><span>Loss given default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397453[]' id='answer-id-1544335' class='answer   answerof-397453 ' value='1544335'   \/><label for='answer-id-1544335' id='answer-label-1544335' class=' answer'><span>Exposure at default<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-17' style=';'><div id='questionWrap-17'  class='   watupro-question-id-397454'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>17. <\/span>By lowering the spread on lower credit quality borrowers, the bank will typically achieve all of the following outcomes EXCEPT:<\/div><input type='hidden' name='question_id[]' id='qID_17' value='397454' \/><input type='hidden' id='answerType397454' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397454[]' id='answer-id-1544336' class='answer   answerof-397454 ' value='1544336'   \/><label for='answer-id-1544336' id='answer-label-1544336' class=' answer'><span>Aggressively courting of new business<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397454[]' id='answer-id-1544337' class='answer   answerof-397454 ' value='1544337'   \/><label for='answer-id-1544337' id='answer-label-1544337' class=' answer'><span>Lower probability of default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397454[]' id='answer-id-1544338' class='answer   answerof-397454 ' value='1544338'   \/><label for='answer-id-1544338' id='answer-label-1544338' class=' answer'><span>Rapid growth<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397454[]' id='answer-id-1544339' class='answer   answerof-397454 ' value='1544339'   \/><label for='answer-id-1544339' id='answer-label-1544339' class=' answer'><span>Higher losses in case of default<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-18' style=';'><div id='questionWrap-18'  class='   watupro-question-id-397455'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>18. <\/span>In the United States, which one of the following four options represents the largest component of securitized debt?<\/div><input type='hidden' name='question_id[]' id='qID_18' value='397455' \/><input type='hidden' id='answerType397455' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397455[]' id='answer-id-1544340' class='answer   answerof-397455 ' value='1544340'   \/><label for='answer-id-1544340' id='answer-label-1544340' class=' answer'><span>Education loans<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397455[]' id='answer-id-1544341' class='answer   answerof-397455 ' value='1544341'   \/><label for='answer-id-1544341' id='answer-label-1544341' class=' answer'><span>Credit card loans<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397455[]' id='answer-id-1544342' class='answer   answerof-397455 ' value='1544342'   \/><label for='answer-id-1544342' id='answer-label-1544342' class=' answer'><span>Real estate loans<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397455[]' id='answer-id-1544343' class='answer   answerof-397455 ' value='1544343'   \/><label for='answer-id-1544343' id='answer-label-1544343' class=' answer'><span>Lines of credit<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-19' style=';'><div id='questionWrap-19'  class='   watupro-question-id-397456'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>19. <\/span>From the bank's point of view, repricing the retail debt portfolio will introduce risks of fluctuations in: <br \/>\r<br>I. Duration <br \/>\r<br>II. Loss given default <br \/>\r<br>III. Interest rates <br \/>\r<br>IV. Bank spreads<\/div><input type='hidden' name='question_id[]' id='qID_19' value='397456' \/><input type='hidden' id='answerType397456' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397456[]' id='answer-id-1544344' class='answer   answerof-397456 ' value='1544344'   \/><label for='answer-id-1544344' id='answer-label-1544344' class=' answer'><span>I<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397456[]' id='answer-id-1544345' class='answer   answerof-397456 ' value='1544345'   \/><label for='answer-id-1544345' id='answer-label-1544345' class=' answer'><span>II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397456[]' id='answer-id-1544346' class='answer   answerof-397456 ' value='1544346'   \/><label for='answer-id-1544346' id='answer-label-1544346' class=' answer'><span>I, II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397456[]' id='answer-id-1544347' class='answer   answerof-397456 ' value='1544347'   \/><label for='answer-id-1544347' id='answer-label-1544347' class=' answer'><span>III, IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-20' style=';'><div id='questionWrap-20'  class='   watupro-question-id-397457'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>20. <\/span>Altman's Z-score incorporates all the following variables that are predictive of bankruptcy EXCEPT:<\/div><input type='hidden' name='question_id[]' id='qID_20' value='397457' \/><input type='hidden' id='answerType397457' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397457[]' id='answer-id-1544348' class='answer   answerof-397457 ' value='1544348'   \/><label for='answer-id-1544348' id='answer-label-1544348' class=' answer'><span>Return on total assets<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397457[]' id='answer-id-1544349' class='answer   answerof-397457 ' value='1544349'   \/><label for='answer-id-1544349' id='answer-label-1544349' class=' answer'><span>Sales to total assets<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397457[]' id='answer-id-1544350' class='answer   answerof-397457 ' value='1544350'   \/><label for='answer-id-1544350' id='answer-label-1544350' class=' answer'><span>Equity to debt<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397457[]' id='answer-id-1544351' class='answer   answerof-397457 ' value='1544351'   \/><label for='answer-id-1544351' id='answer-label-1544351' class=' answer'><span>Return on equity<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-21' style=';'><div id='questionWrap-21'  class='   watupro-question-id-397458'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>21. <\/span>Counterparty credit risk assessment differs from traditional credit risk assessment in all of the following features EXCEPT:<\/div><input type='hidden' name='question_id[]' id='qID_21' value='397458' \/><input type='hidden' id='answerType397458' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397458[]' id='answer-id-1544352' class='answer   answerof-397458 ' value='1544352'   \/><label for='answer-id-1544352' id='answer-label-1544352' class=' answer'><span>Exposures can often be netted<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397458[]' id='answer-id-1544353' class='answer   answerof-397458 ' value='1544353'   \/><label for='answer-id-1544353' id='answer-label-1544353' class=' answer'><span>Exposure at default may be negatively correlated to the probability of default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397458[]' id='answer-id-1544354' class='answer   answerof-397458 ' value='1544354'   \/><label for='answer-id-1544354' id='answer-label-1544354' class=' answer'><span>Counterparty risk creates a two-way credit exposure<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397458[]' id='answer-id-1544355' class='answer   answerof-397458 ' value='1544355'   \/><label for='answer-id-1544355' id='answer-label-1544355' class=' answer'><span>Collateral arrangements are typically static in nature<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-22' style=';'><div id='questionWrap-22'  class='   watupro-question-id-397459'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>22. <\/span>All of the following performance statistics typically benefit country's creditworthiness EXCEPT:<\/div><input type='hidden' name='question_id[]' id='qID_22' value='397459' \/><input type='hidden' id='answerType397459' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397459[]' id='answer-id-1544356' class='answer   answerof-397459 ' value='1544356'   \/><label for='answer-id-1544356' id='answer-label-1544356' class=' answer'><span>Low unemployment<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397459[]' id='answer-id-1544357' class='answer   answerof-397459 ' value='1544357'   \/><label for='answer-id-1544357' id='answer-label-1544357' class=' answer'><span>Low inflation<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397459[]' id='answer-id-1544358' class='answer   answerof-397459 ' value='1544358'   \/><label for='answer-id-1544358' id='answer-label-1544358' class=' answer'><span>High degrees of investment<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397459[]' id='answer-id-1544359' class='answer   answerof-397459 ' value='1544359'   \/><label for='answer-id-1544359' id='answer-label-1544359' class=' answer'><span>Low degrees of savings<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-23' style=';'><div id='questionWrap-23'  class='   watupro-question-id-397460'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>23. <\/span>A financial analyst is trying to distinguish credit risk from market risk. A $100 loan collateralized with $200 in stock has limited ___, but an uncollateralized obligation issued by a large bank to pay an amount linked to the long-term performance of the Nikkei 225 Index that measures the performance of the leading Japanese stocks on the Tokyo Stock Exchange likely has more ___ than ___.<\/div><input type='hidden' name='question_id[]' id='qID_23' value='397460' \/><input type='hidden' id='answerType397460' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397460[]' id='answer-id-1544360' class='answer   answerof-397460 ' value='1544360'   \/><label for='answer-id-1544360' id='answer-label-1544360' class=' answer'><span>Legal risk; market risk; credit risk<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397460[]' id='answer-id-1544361' class='answer   answerof-397460 ' value='1544361'   \/><label for='answer-id-1544361' id='answer-label-1544361' class=' answer'><span>Market risk; market risk; credit risk<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397460[]' id='answer-id-1544362' class='answer   answerof-397460 ' value='1544362'   \/><label for='answer-id-1544362' id='answer-label-1544362' class=' answer'><span>Market risk; credit risk; market risk<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397460[]' id='answer-id-1544363' class='answer   answerof-397460 ' value='1544363'   \/><label for='answer-id-1544363' id='answer-label-1544363' class=' answer'><span>Credit risk, legal risk; market risk<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-24' style=';'><div id='questionWrap-24'  class='   watupro-question-id-397461'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>24. <\/span>Which one of the following four statements regarding counterparty credit risk is INCORRECT?<\/div><input type='hidden' name='question_id[]' id='qID_24' value='397461' \/><input type='hidden' id='answerType397461' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397461[]' id='answer-id-1544364' class='answer   answerof-397461 ' value='1544364'   \/><label for='answer-id-1544364' id='answer-label-1544364' class=' answer'><span>Counterparty credit risk refers to the inability to realize gains in a contract with a counterparty due to its default.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397461[]' id='answer-id-1544365' class='answer   answerof-397461 ' value='1544365'   \/><label for='answer-id-1544365' id='answer-label-1544365' class=' answer'><span>The exposure at default is variable due to fluctuations in swap valuations.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397461[]' id='answer-id-1544366' class='answer   answerof-397461 ' value='1544366'   \/><label for='answer-id-1544366' id='answer-label-1544366' class=' answer'><span>The exposure at default can be negatively correlated to probability of default.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397461[]' id='answer-id-1544367' class='answer   answerof-397461 ' value='1544367'   \/><label for='answer-id-1544367' id='answer-label-1544367' class=' answer'><span>Dynamic collateral provisions often increase counterparty risk considerably.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-25' style=';'><div id='questionWrap-25'  class='   watupro-question-id-397462'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>25. <\/span>A credit risk analyst is evaluating factors that quantify credit risk exposures. <br \/>\r<br>The risk that the borrower would fail to make full and timely repayments of its financial obligations over a given time horizon typically refers to:<\/div><input type='hidden' name='question_id[]' id='qID_25' value='397462' \/><input type='hidden' id='answerType397462' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397462[]' id='answer-id-1544368' class='answer   answerof-397462 ' value='1544368'   \/><label for='answer-id-1544368' id='answer-label-1544368' class=' answer'><span>Duration of default.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397462[]' id='answer-id-1544369' class='answer   answerof-397462 ' value='1544369'   \/><label for='answer-id-1544369' id='answer-label-1544369' class=' answer'><span>Exposure at default.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397462[]' id='answer-id-1544370' class='answer   answerof-397462 ' value='1544370'   \/><label for='answer-id-1544370' id='answer-label-1544370' class=' answer'><span>Loss given default.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397462[]' id='answer-id-1544371' class='answer   answerof-397462 ' value='1544371'   \/><label for='answer-id-1544371' id='answer-label-1544371' class=' answer'><span>Probability of default.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-26' style=';'><div id='questionWrap-26'  class='   watupro-question-id-397463'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>26. <\/span>Which one of the following four options correctly identifies the core difference between bonds and loans?<\/div><input type='hidden' name='question_id[]' id='qID_26' value='397463' \/><input type='hidden' id='answerType397463' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397463[]' id='answer-id-1544372' class='answer   answerof-397463 ' value='1544372'   \/><label for='answer-id-1544372' id='answer-label-1544372' class=' answer'><span>These instruments receive a different legal treatment.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397463[]' id='answer-id-1544373' class='answer   answerof-397463 ' value='1544373'   \/><label for='answer-id-1544373' id='answer-label-1544373' class=' answer'><span>These instruments have different pricing drivers.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397463[]' id='answer-id-1544374' class='answer   answerof-397463 ' value='1544374'   \/><label for='answer-id-1544374' id='answer-label-1544374' class=' answer'><span>These instruments cannot be used to estimate credit capital under provisions of the Basel II Accord.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397463[]' id='answer-id-1544375' class='answer   answerof-397463 ' value='1544375'   \/><label for='answer-id-1544375' id='answer-label-1544375' class=' answer'><span>These instruments are subject to different credit counterparty regulations.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-27' style=';'><div id='questionWrap-27'  class='   watupro-question-id-397464'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>27. <\/span>Which one of the following four formulas correctly identifies the expected loss for all credit instruments?<\/div><input type='hidden' name='question_id[]' id='qID_27' value='397464' \/><input type='hidden' id='answerType397464' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397464[]' id='answer-id-1544376' class='answer   answerof-397464 ' value='1544376'   \/><label for='answer-id-1544376' id='answer-label-1544376' class=' answer'><span>Expected Loss = Probability of Default x Loss Given Default x Exposure at Default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397464[]' id='answer-id-1544377' class='answer   answerof-397464 ' value='1544377'   \/><label for='answer-id-1544377' id='answer-label-1544377' class=' answer'><span>Expected Loss = Probability of Default x Loss Given Default + Exposure at Default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397464[]' id='answer-id-1544378' class='answer   answerof-397464 ' value='1544378'   \/><label for='answer-id-1544378' id='answer-label-1544378' class=' answer'><span>Expected Loss = Probability of Default x Loss Given Default - Exposure at Default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397464[]' id='answer-id-1544379' class='answer   answerof-397464 ' value='1544379'   \/><label for='answer-id-1544379' id='answer-label-1544379' class=' answer'><span>Expected Loss = Probability of Default x Loss Given Default \/ Exposure at Default<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-28' style=';'><div id='questionWrap-28'  class='   watupro-question-id-397465'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>28. <\/span>Gamma Bank provides a $100,000 loan to Big Bath retail stores at 5% interest rate (paid annually). The loan is collateralized with $55,000. The loan also has an annual expected default rate of 2%, and loss given default at 50%. <br \/>\r<br>In this case, what will the bank's exposure at default (EAD) be?<\/div><input type='hidden' name='question_id[]' id='qID_28' value='397465' \/><input type='hidden' id='answerType397465' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397465[]' id='answer-id-1544380' class='answer   answerof-397465 ' value='1544380'   \/><label for='answer-id-1544380' id='answer-label-1544380' class=' answer'><span>$25,000<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397465[]' id='answer-id-1544381' class='answer   answerof-397465 ' value='1544381'   \/><label for='answer-id-1544381' id='answer-label-1544381' class=' answer'><span>$50,000<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397465[]' id='answer-id-1544382' class='answer   answerof-397465 ' value='1544382'   \/><label for='answer-id-1544382' id='answer-label-1544382' class=' answer'><span>$75,000<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397465[]' id='answer-id-1544383' class='answer   answerof-397465 ' value='1544383'   \/><label for='answer-id-1544383' id='answer-label-1544383' class=' answer'><span>$105,000<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-29' style=';'><div id='questionWrap-29'  class='   watupro-question-id-397466'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>29. <\/span>Gamma Bank provides a $100,000 loan to Big Bath retail stores at 5% interest rate (paid annually). The loan is collateralized with $55,000. The loan also has an annual expected default rate of 2%, and loss given default at 50%. <br \/>\r<br>In this case, what will the bank's expected loss be?<\/div><input type='hidden' name='question_id[]' id='qID_29' value='397466' \/><input type='hidden' id='answerType397466' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397466[]' id='answer-id-1544384' class='answer   answerof-397466 ' value='1544384'   \/><label for='answer-id-1544384' id='answer-label-1544384' class=' answer'><span>$500<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397466[]' id='answer-id-1544385' class='answer   answerof-397466 ' value='1544385'   \/><label for='answer-id-1544385' id='answer-label-1544385' class=' answer'><span>$750<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397466[]' id='answer-id-1544386' class='answer   answerof-397466 ' value='1544386'   \/><label for='answer-id-1544386' id='answer-label-1544386' class=' answer'><span>$1,000<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397466[]' id='answer-id-1544387' class='answer   answerof-397466 ' value='1544387'   \/><label for='answer-id-1544387' id='answer-label-1544387' class=' answer'><span>$1,300<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-30' style=';'><div id='questionWrap-30'  class='   watupro-question-id-397467'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>30. <\/span>Gamma Bank provides a $100,000 loan to Big Bath retail stores at 5% interest rate (paid annually). The loan also has an annual expected default rate of 2%, and loss given default at 50%. In this case, what will the bank's expected loss be? <br \/>\r<br>What is the expected loss of this loan?<\/div><input type='hidden' name='question_id[]' id='qID_30' value='397467' \/><input type='hidden' id='answerType397467' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397467[]' id='answer-id-1544388' class='answer   answerof-397467 ' value='1544388'   \/><label for='answer-id-1544388' id='answer-label-1544388' class=' answer'><span>$300<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397467[]' id='answer-id-1544389' class='answer   answerof-397467 ' value='1544389'   \/><label for='answer-id-1544389' id='answer-label-1544389' class=' answer'><span>$550<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397467[]' id='answer-id-1544390' class='answer   answerof-397467 ' value='1544390'   \/><label for='answer-id-1544390' id='answer-label-1544390' class=' answer'><span>$750<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397467[]' id='answer-id-1544391' class='answer   answerof-397467 ' value='1544391'   \/><label for='answer-id-1544391' id='answer-label-1544391' class=' answer'><span>$1,050<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-31' style=';'><div id='questionWrap-31'  class='   watupro-question-id-397468'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>31. <\/span>Which of the following attributes are typical for early models of statistical credit analysis?<\/div><input type='hidden' name='question_id[]' id='qID_31' value='397468' \/><input type='hidden' id='answerType397468' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397468[]' id='answer-id-1544392' class='answer   answerof-397468 ' value='1544392'   \/><label for='answer-id-1544392' id='answer-label-1544392' class=' answer'><span>These models assumed the default of any obligor was independent of the default of any other.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397468[]' id='answer-id-1544393' class='answer   answerof-397468 ' value='1544393'   \/><label for='answer-id-1544393' id='answer-label-1544393' class=' answer'><span>The underlying default assumptions were analytically inconvenient.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397468[]' id='answer-id-1544394' class='answer   answerof-397468 ' value='1544394'   \/><label for='answer-id-1544394' id='answer-label-1544394' class=' answer'><span>The underlying default assumptions failed to develop relatively simple formulas for the determination of portfolio credit risk.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397468[]' id='answer-id-1544395' class='answer   answerof-397468 ' value='1544395'   \/><label for='answer-id-1544395' id='answer-label-1544395' class=' answer'><span>These models effectively incorporated herd behavior.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-32' style=';'><div id='questionWrap-32'  class='   watupro-question-id-397469'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>32. <\/span>A credit analyst wants to determine if her bank is taking too much credit risk. <br \/>\r<br>Which one of the following four strategies will typically provide the most convenient approach to quantify the credit risk exposure for the bank?<\/div><input type='hidden' name='question_id[]' id='qID_32' value='397469' \/><input type='hidden' id='answerType397469' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397469[]' id='answer-id-1544396' class='answer   answerof-397469 ' value='1544396'   \/><label for='answer-id-1544396' id='answer-label-1544396' class=' answer'><span>Assessing aggregate exposure at default at various time points and at various confidence levels<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397469[]' id='answer-id-1544397' class='answer   answerof-397469 ' value='1544397'   \/><label for='answer-id-1544397' id='answer-label-1544397' class=' answer'><span>Simplifying individual credit exposures so that they can be combined into a simplified expression of portfolio risk for the bank<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397469[]' id='answer-id-1544398' class='answer   answerof-397469 ' value='1544398'   \/><label for='answer-id-1544398' id='answer-label-1544398' class=' answer'><span>Using stress testing techniques to forecast underlying macroeconomic factors and bank's idiosyncratic risks<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397469[]' id='answer-id-1544399' class='answer   answerof-397469 ' value='1544399'   \/><label for='answer-id-1544399' id='answer-label-1544399' class=' answer'><span>Analyzing distribution of bank's credit losses and mapping credit risks at various statistical levels<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-33' style=';'><div id='questionWrap-33'  class='   watupro-question-id-397470'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>33. <\/span>When looking at the distribution of portfolio credit losses, the shape of the loss distribution is ___ , as the likelihood of total losses, the sum of expected and unexpected credit losses, is ___ than the likelihood of no credit losses.<\/div><input type='hidden' name='question_id[]' id='qID_33' value='397470' \/><input type='hidden' id='answerType397470' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397470[]' id='answer-id-1544400' class='answer   answerof-397470 ' value='1544400'   \/><label for='answer-id-1544400' id='answer-label-1544400' class=' answer'><span>Symmetric; less<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397470[]' id='answer-id-1544401' class='answer   answerof-397470 ' value='1544401'   \/><label for='answer-id-1544401' id='answer-label-1544401' class=' answer'><span>Symmetric; greater<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397470[]' id='answer-id-1544402' class='answer   answerof-397470 ' value='1544402'   \/><label for='answer-id-1544402' id='answer-label-1544402' class=' answer'><span>Asymmetric; less<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397470[]' id='answer-id-1544403' class='answer   answerof-397470 ' value='1544403'   \/><label for='answer-id-1544403' id='answer-label-1544403' class=' answer'><span>Asymmetric; greater<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-34' style=';'><div id='questionWrap-34'  class='   watupro-question-id-397471'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>34. <\/span>Which one of the following four statements regarding bank's exposure to credit and default risk is INCORRECT?<\/div><input type='hidden' name='question_id[]' id='qID_34' value='397471' \/><input type='hidden' id='answerType397471' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397471[]' id='answer-id-1544404' class='answer   answerof-397471 ' value='1544404'   \/><label for='answer-id-1544404' id='answer-label-1544404' class=' answer'><span>The more the bank diversifies its credit portfolio, the better spread its credit risks become.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397471[]' id='answer-id-1544405' class='answer   answerof-397471 ' value='1544405'   \/><label for='answer-id-1544405' id='answer-label-1544405' class=' answer'><span>In debt management, the value of any loan exposure will change typically in a fashion similar the same way that an equity investment can.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397471[]' id='answer-id-1544406' class='answer   answerof-397471 ' value='1544406'   \/><label for='answer-id-1544406' id='answer-label-1544406' class=' answer'><span>In debt management, the goal is to minimize the effect of any defaults.<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397471[]' id='answer-id-1544407' class='answer   answerof-397471 ' value='1544407'   \/><label for='answer-id-1544407' id='answer-label-1544407' class=' answer'><span>Default risk cannot be hedged away fully, and it will always exist for the holder of the credit or for the person insuring against the credit or default event.<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-35' style=';'><div id='questionWrap-35'  class='   watupro-question-id-397472'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>35. <\/span>To manage its credit portfolio, Beta Bank can directly sell the following portfolio elements: <br \/>\r<br>I. Bonds <br \/>\r<br>II. Marketable loans <br \/>\r<br>III. Credit card loans<\/div><input type='hidden' name='question_id[]' id='qID_35' value='397472' \/><input type='hidden' id='answerType397472' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397472[]' id='answer-id-1544408' class='answer   answerof-397472 ' value='1544408'   \/><label for='answer-id-1544408' id='answer-label-1544408' class=' answer'><span>I<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397472[]' id='answer-id-1544409' class='answer   answerof-397472 ' value='1544409'   \/><label for='answer-id-1544409' id='answer-label-1544409' class=' answer'><span>II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397472[]' id='answer-id-1544410' class='answer   answerof-397472 ' value='1544410'   \/><label for='answer-id-1544410' id='answer-label-1544410' class=' answer'><span>I, II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397472[]' id='answer-id-1544411' class='answer   answerof-397472 ' value='1544411'   \/><label for='answer-id-1544411' id='answer-label-1544411' class=' answer'><span>II, III<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-36' style=';'><div id='questionWrap-36'  class='   watupro-question-id-397473'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>36. <\/span>As DeltaBank explores the securitization business, it is most likely to embrace securitization to: <br \/>\r<br>I. Bring transparency to the bank's balance sheet <br \/>\r<br>II. Create a new profit center for the bank <br \/>\r<br>III. Strategically release risk capital and regulatory capital for redeployment <br \/>\r<br>IV. Generate cash for additional debt origination<\/div><input type='hidden' name='question_id[]' id='qID_36' value='397473' \/><input type='hidden' id='answerType397473' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397473[]' id='answer-id-1544412' class='answer   answerof-397473 ' value='1544412'   \/><label for='answer-id-1544412' id='answer-label-1544412' class=' answer'><span>I, III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397473[]' id='answer-id-1544413' class='answer   answerof-397473 ' value='1544413'   \/><label for='answer-id-1544413' id='answer-label-1544413' class=' answer'><span>II, IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397473[]' id='answer-id-1544414' class='answer   answerof-397473 ' value='1544414'   \/><label for='answer-id-1544414' id='answer-label-1544414' class=' answer'><span>I, II, III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397473[]' id='answer-id-1544415' class='answer   answerof-397473 ' value='1544415'   \/><label for='answer-id-1544415' id='answer-label-1544415' class=' answer'><span>II, III, IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-37' style=';'><div id='questionWrap-37'  class='   watupro-question-id-397474'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>37. <\/span>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.<\/div><input type='hidden' name='question_id[]' id='qID_37' value='397474' \/><input type='hidden' id='answerType397474' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397474[]' id='answer-id-1544416' class='answer   answerof-397474 ' value='1544416'   \/><label for='answer-id-1544416' id='answer-label-1544416' class=' answer'><span>Decreases; increases;<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397474[]' id='answer-id-1544417' class='answer   answerof-397474 ' value='1544417'   \/><label for='answer-id-1544417' id='answer-label-1544417' class=' answer'><span>Increases; increases;<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397474[]' id='answer-id-1544418' class='answer   answerof-397474 ' value='1544418'   \/><label for='answer-id-1544418' id='answer-label-1544418' class=' answer'><span>Increases; decreases;<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397474[]' id='answer-id-1544419' class='answer   answerof-397474 ' value='1544419'   \/><label for='answer-id-1544419' id='answer-label-1544419' class=' answer'><span>Decreases; increases;<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-38' style=';'><div id='questionWrap-38'  class='   watupro-question-id-397475'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>38. <\/span>Which of the following risk types are historically associated with credit derivatives? <br \/>\r<br>I. Documentation risk <br \/>\r<br>II. Definition of credit events <br \/>\r<br>III. Occurrence of credit events <br \/>\r<br>IV. Enterprise risk<\/div><input type='hidden' name='question_id[]' id='qID_38' value='397475' \/><input type='hidden' id='answerType397475' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397475[]' id='answer-id-1544420' class='answer   answerof-397475 ' value='1544420'   \/><label for='answer-id-1544420' id='answer-label-1544420' class=' answer'><span>I, IV<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397475[]' id='answer-id-1544421' class='answer   answerof-397475 ' value='1544421'   \/><label for='answer-id-1544421' id='answer-label-1544421' class=' answer'><span>I, II<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397475[]' id='answer-id-1544422' class='answer   answerof-397475 ' value='1544422'   \/><label for='answer-id-1544422' id='answer-label-1544422' class=' answer'><span>I, II, III<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397475[]' id='answer-id-1544423' class='answer   answerof-397475 ' value='1544423'   \/><label for='answer-id-1544423' id='answer-label-1544423' class=' answer'><span>II, III, IV<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-39' style=';'><div id='questionWrap-39'  class='   watupro-question-id-397476'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>39. <\/span>The pricing of credit default swaps is a function of all of the following EXCEPT:<\/div><input type='hidden' name='question_id[]' id='qID_39' value='397476' \/><input type='hidden' id='answerType397476' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397476[]' id='answer-id-1544424' class='answer   answerof-397476 ' value='1544424'   \/><label for='answer-id-1544424' id='answer-label-1544424' class=' answer'><span>Probability of default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397476[]' id='answer-id-1544425' class='answer   answerof-397476 ' value='1544425'   \/><label for='answer-id-1544425' id='answer-label-1544425' class=' answer'><span>Duration<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397476[]' id='answer-id-1544426' class='answer   answerof-397476 ' value='1544426'   \/><label for='answer-id-1544426' id='answer-label-1544426' class=' answer'><span>Loss given default<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397476[]' id='answer-id-1544427' class='answer   answerof-397476 ' value='1544427'   \/><label for='answer-id-1544427' id='answer-label-1544427' class=' answer'><span>Market spreads<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div class='watu-question ' id='question-40' style=';'><div id='questionWrap-40'  class='   watupro-question-id-397477'>\n\t\t\t<div class='question-content'><div><span class='watupro_num'>40. <\/span>To safeguard its capital and obtain insurance if the borrowers cannot repay their loans, Gamma Bank accepts financial collateral to manage its credit risk and mitigate the effect of the borrowers' defaults. <br \/>\r<br>Gamma Bank will typically accept all of the following instruments as financial collateral EXCEPT?<\/div><input type='hidden' name='question_id[]' id='qID_40' value='397477' \/><input type='hidden' id='answerType397477' value='radio'><!-- end question-content--><\/div><div class='question-choices watupro-choices-columns '><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397477[]' id='answer-id-1544428' class='answer   answerof-397477 ' value='1544428'   \/><label for='answer-id-1544428' id='answer-label-1544428' class=' answer'><span>Unrated bonds issued and traded on a recognized exchange<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397477[]' id='answer-id-1544429' class='answer   answerof-397477 ' value='1544429'   \/><label for='answer-id-1544429' id='answer-label-1544429' class=' answer'><span>Equities and convertible bonds included in a main market index<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397477[]' id='answer-id-1544430' class='answer   answerof-397477 ' value='1544430'   \/><label for='answer-id-1544430' id='answer-label-1544430' class=' answer'><span>Commercial debts owed to a company in a form of receivables<\/span><\/label><\/div><div class='watupro-question-choice  ' dir='auto' ><input type='radio' name='answer-397477[]' id='answer-id-1544431' class='answer   answerof-397477 ' value='1544431'   \/><label for='answer-id-1544431' id='answer-label-1544431' class=' answer'><span>Mutual fund shares and similar unit investment vehicles subject to daily quotes<\/span><\/label><\/div><!-- end question-choices--><\/div><!-- end questionWrap--><\/div><\/div><div style='display:none' id='question-41'>\n\t<div class='question-content'>\n\t\t<img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.dumpsbase.com\/freedumps\/wp-content\/plugins\/watupro\/img\/loading.gif\" width=\"16\" height=\"16\" alt=\"Loading...\" title=\"Loading...\" \/>&nbsp;Loading...\t<\/div>\n<\/div>\n\n<br \/>\n\t\n\t\t\t<div class=\"watupro_buttons flex \" id=\"watuPROButtons9990\" >\n\t\t  <div id=\"prev-question\" style=\"display:none;\"><input type=\"button\" value=\"&lt; Previous\" 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397445:1544300,1544301,1544302,1544303 | 397446:1544304,1544305,1544306,1544307 | 397447:1544308,1544309,1544310,1544311 | 397448:1544312,1544313,1544314,1544315 | 397449:1544316,1544317,1544318,1544319 | 397450:1544320,1544321,1544322,1544323 | 397451:1544324,1544325,1544326,1544327 | 397452:1544328,1544329,1544330,1544331 | 397453:1544332,1544333,1544334,1544335 | 397454:1544336,1544337,1544338,1544339 | 397455:1544340,1544341,1544342,1544343 | 397456:1544344,1544345,1544346,1544347 | 397457:1544348,1544349,1544350,1544351 | 397458:1544352,1544353,1544354,1544355 | 397459:1544356,1544357,1544358,1544359 | 397460:1544360,1544361,1544362,1544363 | 397461:1544364,1544365,1544366,1544367 | 397462:1544368,1544369,1544370,1544371 | 397463:1544372,1544373,1544374,1544375 | 397464:1544376,1544377,1544378,1544379 | 397465:1544380,1544381,1544382,1544383 | 397466:1544384,1544385,1544386,1544387 | 397467:1544388,1544389,1544390,1544391 | 397468:1544392,1544393,1544394,1544395 | 397469:1544396,1544397,1544398,1544399 | 397470:1544400,1544401,1544402,1544403 | 397471:1544404,1544405,1544406,1544407 | 397472:1544408,1544409,1544410,1544411 | 397473:1544412,1544413,1544414,1544415 | 397474:1544416,1544417,1544418,1544419 | 397475:1544420,1544421,1544422,1544423 | 397476:1544424,1544425,1544426,1544427 | 397477:1544428,1544429,1544430,1544431\" \/>\n\t<input type=\"hidden\" name=\"no_ajax\" value=\"0\">\t\t\t<\/form>\n\t<p>&nbsp;<\/p>\n<\/div>\n\n<script type=\"text\/javascript\">\n\/\/jQuery(document).ready(function(){\ndocument.addEventListener(\"DOMContentLoaded\", function(event) { \t\nvar question_ids = \"397438,397439,397440,397441,397442,397443,397444,397445,397446,397447,397448,397449,397450,397451,397452,397453,397454,397455,397456,397457,397458,397459,397460,397461,397462,397463,397464,397465,397466,397467,397468,397469,397470,397471,397472,397473,397474,397475,397476,397477\";\nWatuPROSettings[9990] = {};\nWatuPRO.qArr = question_ids.split(',');\nWatuPRO.exam_id = 9990;\t    \nWatuPRO.post_id = 101718;\nWatuPRO.store_progress = 0;\nWatuPRO.curCatPage = 1;\nWatuPRO.requiredIDs=\"0\".split(\",\");\nWatuPRO.hAppID = \"0.15637600 1779388786\";\nvar url = \"https:\/\/www.dumpsbase.com\/freedumps\/wp-content\/plugins\/watupro\/show_exam.php\";\nWatuPRO.examMode = 1;\nWatuPRO.siteURL=\"https:\/\/www.dumpsbase.com\/freedumps\/wp-admin\/admin-ajax.php\";\nWatuPRO.emailIsNotRequired = 0;\nWatuPROIntel.init(9990);\nWatuPRO.inCategoryPages=1;});    \t \n<\/script>\n<p>&nbsp;<\/p>\n<h3>Continue to check the <a href=\"https:\/\/www.dumpsbase.com\/freedumps\/financial-risk-and-regulation-frr-series-2016-frr-dumps-v9-02-2016-frr-free-dumps-part-2-q41-q80-for-reading.html\"><span style=\"background-color: #00ffff;\"><em>2016-FRR free dumps (Part 2, Q41-Q80) of V9.02<\/em><\/span><\/a> online.<\/h3>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Download the most updated 2016-FRR dumps from DumpsBase and enhance your learning experience with the latest exam questions and answers. We updated the Financial Risk and Regulation (FRR) 2016-FRR dumps to V9.02, providing 387 exam questions and answers to reflect the real exam format and content, giving you an edge in passing on your first [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8693,8692],"tags":[18927,18158],"class_list":["post-101718","post","type-post","status-publish","format-standard","hentry","category-financial-risk-and-regulation","category-garp","tag-2016-frr","tag-2016-frr-dumps"],"_links":{"self":[{"href":"https:\/\/www.dumpsbase.com\/freedumps\/wp-json\/wp\/v2\/posts\/101718","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.dumpsbase.com\/freedumps\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dumpsbase.com\/freedumps\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dumpsbase.com\/freedumps\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dumpsbase.com\/freedumps\/wp-json\/wp\/v2\/comments?post=101718"}],"version-history":[{"count":3,"href":"https:\/\/www.dumpsbase.com\/freedumps\/wp-json\/wp\/v2\/posts\/101718\/revisions"}],"predecessor-version":[{"id":109413,"href":"https:\/\/www.dumpsbase.com\/freedumps\/wp-json\/wp\/v2\/posts\/101718\/revisions\/109413"}],"wp:attachment":[{"href":"https:\/\/www.dumpsbase.com\/freedumps\/wp-json\/wp\/v2\/media?parent=101718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dumpsbase.com\/freedumps\/wp-json\/wp\/v2\/categories?post=101718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dumpsbase.com\/freedumps\/wp-json\/wp\/v2\/tags?post=101718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}