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GARP ICBRR Exam (page: 11)
GARP International Certificate in Banking Risk and Regulation (ICBRR)
Updated on: 15-Feb-2026

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ICBRR PDF 342 Questions

Which one of the following four alternatives lists the three most widely traded currencies on the global foreign exchange market, as of April 2007, in the decreasing order of market share? EUR is the abbreviation of the European euro, JPY is for the Japanese yen, and USD is for the United States dollar, respectively.

  1. JPY, EUR, USD
  2. USD, EUR, JPY
  3. USD, JPY, EUR
  4. EUR, USD, JPY

Answer(s): B



An asset manager for a large mutual fund is considering forward exchange positions traded in a clearinghouse system and needs to mitigate the risks created as a result of this operation.
Which of the following risks will be created as a result of the forward exchange transaction?

  1. Exchange rate risk
  2. Exchange rate and interest rate risk
  3. Credit risk
  4. Exchange rate and credit risk

Answer(s): B



Which one of the following statements correctly identifies risks in foreign exchange forwards?

  1. Short-term forward price fluctuations are driven by changes in the spot exchange rate, since most inter-country interest rates differentials are significant, and the effect of compounding is large for short periods of time.
  2. Short-term forward price fluctuations are driven by changes in the spot exchange rate, since most inter-country interest rates differentials are small, and the effect of compounding is small for short periods of time.
  3. Long-term forward price fluctuations are driven by changes in the spot exchange rate, since most inter-country interest rates differentials are small, and the effect of compounding is large for short periods of time.
  4. Long-term forward price fluctuations are driven by changes in the spot exchange rate, since most inter-country interest rates differentials are significant, and the effect of compounding is small for short periods of time.

Answer(s): B



Which one of the four following statements regarding foreign exchange (FX) swap transactions is INCORRECT?

  1. FX swap is a common short-term transaction.
  2. FX swap is normally used for hedging various currency positions.
  3. FX swap generates more exchange rate risk than simple forward transactions.
  4. FX swap is generally used to for funding foreign currency balances and currency speculation.

Answer(s): C



To hedge a foreign exchange exposure on behalf of a client, a small regional bank seeks to enter into an offsetting foreign exchange transaction. It cannot access the large and liquid interbank market open primarily to larger banks. At which one of the following exchanges can the smaller bank trade the currency futures contracts?

I) The Tokyo Futures Exchange
II) The Euronext-Liffe Exchange
III) The Chicago Mercantile Exchange

  1. I
  2. III
  3. II, III
  4. I, II, III

Answer(s): D



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Vey 5/27/2023 12:06:00 AM

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