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GARP ICBRR Exam (page: 6)
GARP International Certificate in Banking Risk and Regulation (ICBRR)
Updated on: 15-Feb-2026

Viewing Page 6 of 70
ICBRR PDF 342 Questions

Which one of the following four options correctly identifies the core difference between bonds and loans?

  1. These instruments receive a different legal treatment.
  2. These instruments have different pricing drivers.
  3. These instruments cannot be used to estimate credit capital under provisions of the Basel II Accord.
  4. These instruments are subject to different credit counterparty regulations.

Answer(s): A



Which one of the following four formulas correctly identifies the expected loss for all credit instruments?

  1. Expected Loss = Probability of Default x Loss Given Default x Exposure at Default
  2. Expected Loss = Probability of Default x Loss Given Default + Exposure at Default
  3. Expected Loss = Probability of Default x Loss Given Default - Exposure at Default
  4. Expected Loss = Probability of Default x Loss Given Default / Exposure at Default

Answer(s): A



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 defaultrate of 2%, and loss given default at 50%. In this case, what will the bank's exposure at default (EAD) be?

  1. $25,000
  2. $50,000
  3. $75,000
  4. $105,000

Answer(s): B



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%. In this case, what will the bank's expected loss be?

  1. $500
  2. $750
  3. $1,000
  4. $1,300

Answer(s): A



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? What is the expected loss of this loan?

  1. $300
  2. $550
  3. $750
  4. $1,050

Answer(s): D



Viewing Page 6 of 70



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

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