Easy FRM Part 1 Practice Questions

202 free easy-difficulty FRM Part 1 questions, drawn live from KomFi's calibrated bank. Build the foundation first: these test the core mechanics every harder question assumes.

1. A 'Fallen Angel' is a term used in the bond market to describe:
2. A 'long' position in which of the following provides insurance against a rise in prices?
3. Immediately following a reset date (and the subsequent payment), what is the value of the floating-rate leg (B
4. In a clearinghouse structure, multilateral netting allows for:
5. In an exchange-traded gold futures contract, if the account balance falls below the 'Maintenance Margin' level
6. In a plain-vanilla interest-rate swap, which of the following best describes the fundamental exchange occurrin
7. In the context of derivative markets, what does the term 'counterparty credit risk' specifically refer to for
8. The variation margin is the cash amount that is:
9. What happens if a futures trader fails to meet a variation margin call in a timely manner?
10. What is the maximum possible loss for an investor who writes (shorts) a naked call option?
11. What is the Weighted Average Coupon (WAC) of the pool?
12. In a commodity market where the convenience yield is significantly higher than the sum of the risk-free rate a
13. Which of the following describes 'settlement risk' (also known as Herstatt risk)?
14. A bond pays coupons on June 1 and December 1. If an investor buys the bond with a settlement date of July 1, h
15. A firm enters a short forward contract on a currency. If the currency depreciates significantly against the ho
16. How does the 'Issuer-Pays' model differ from the 'Subscriber-Pays' model in the rating industry?
17. If an obligor survives Year 1 with a 98% probability, and has a 97% probability of surviving Year 2 given it s
18. In a forward contract, the 'delivery price' is usually set so that the initial market value of the contract is
19. What happens if a futures trader fails to meet a margin call by the required deadline?
20. What happens to the variation margin deposited by a trader with a losing position?
21. What is 'multilateral netting' in a CCP-cleared swap market?
22. What is 'novation' in the context of centrally cleared swaps?
23. What is the difference between 'variation margin' and 'initial margin' regarding their role in credit risk?
24. What is the primary difference between a 'swap' and an 'FRA'?
25. What is the relationship between an obligor's probability of default (PD) and the credit rating assigned by an
26. A 'fiduciary call' is a specific application of put-call par… — Which two components comprise this strategy?
27. Under put-call parity, what happens if the spot price S_0 equals the present value of the strike price Ke^-rT?
28. Within Markets — Properties & Pricing Bounds of Options, which term matches this definition: “maximum of spot
29. Within Markets — Properties & Pricing Bounds of Options, which term matches this definition: “maximum of strik
30. Within Markets — Properties & Pricing Bounds of Options, which statement correctly describes Put intrinsic val

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