easy · FRM Part 1 Foundations of Risk Management

Under the GARP Code of Conduct, if a risk manager becomes aware that a colleague is deliberately falsifying risk reports to hide limit breaches, what is their primary professional obligation?

1. Confront the colleague privately but avoid escalating to preserve team cohesion.
2. Ignore the situation entirely if the breaches have not yet caused a measurable financial loss.
3. Report the violation through appropriate internal channels and not condone the behavior.
4. Maintain strict confidentiality, since the information was learned during professional work.

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