Easy FRM Part 1 Practice Questions

144 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. According to the CAPM, which type of risk are investors compensated for bearing?
2. What specific variety of liquidity risk is being described?
3. How is 'Risk Capacity' distinguished from 'Risk Appetite' in a standard risk governance framework?
4. If a loan has a Probability of Default (PD) of 2.0%, an Exposure at Default (EAD) of $1,000,000, and a Recover
5. If two portfolios have the same Sharpe ratio but one has positive skewness and the other has negative skewness
6. In a 'Liquidity Spiral', what is the primary channel by which market liquidity risk and funding liquidity risk
7. In the context of the CAPM, what is the definition of 'Alpha' (α)?
8. In the risk decomposition formula σ^2_i = β^2_i σ^2_M + σ^2_ε, what does σ^2_ε represent?
9. The BCBS 239 principle of 'Timeliness' suggests that risk reporting should be more frequent during which of th
10. Which link completes the following sequence: Funding Pressure rightarrow Fire Sales rightarrow dots rightarrow
11. The 'Tangency Portfolio' on the efficient frontier is also known in equilibrium as:
12. The 'Two-Fund Separation' theorem suggests that all investors will hold a combination of which two things?
13. A probability distribution that is asymmetric and has a significantly long tail extending to the left is said
14. A single discrete trial that results in exactly one of two possible outcomes (success or failure) is known as
15. How does the mean of a lognormal distribution compare to the mean of its associated normal distribution (X = e
16. If an analyst says a return series has 'fat tails,' what does this imply for a risk model based on the normal
17. If the correlation between two assets is -1.0, what does this indicate about their co-movement?
18. In Bayesian inference, what does the term 'Updating' refer to?
19. In combinatorics, which coefficient represents the number of ways to select r items from a set of n distinct i
20. In the context of credit risk, if D is the event of default and F is a model flag, how is the 'unconditional d
21. The normal distribution is characterized by its symmetry. What is the theoretical skewness of any perfectly no
22. How many parameters are required to fully define its shape and location?
23. What does the Coefficient of Determination R^2 measure in a regression analysis?
24. What happens to the standard error of the mean if the sample size is quadrupled?
25. What is the probability that a standard normal random variable Z takes a value less than its mean?
26. What is the variance of a standard normal random variable?
27. When constructing a 99% confidence interval for a population mean using a large sample size, which two-tailed
28. What is the Expected Loss (EL) in dollars?
29. According to the standard 'Default Waterfall' of a Central Counterparty (CCP), which layer of financial resour
30. A 'Fallen Angel' is a term used in the bond market to describe:

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