Easy FRM Part 2 Practice Questions

213 free easy-difficulty FRM Part 2 questions, drawn live from KomFi's calibrated bank. Build the foundation first: these test the core mechanics every harder question assumes.

1. What is the bank's Liquidity Coverage Ratio (LCR), and does it meet the minimum Basel III requirement?
2. According to the structural Merton model, the equity of a levered firm can be viewed as which type of derivati
3. A Merton-style structural credit model treats a firm's equit… — In this framework, what does the strike price
4. If a bank records 11 exceptions in a 250-day backtesting window for 99% VaR, what is the regulatory presumptio
5. A fund manager calculates the 'Marginal VaR' for an equity p… — What does this metric specifically measure?
6. What happens to the VaR estimate if we move from a thin-tailed (Gumbel, ξ = 0) model to a heavy-tailed (Fréche
7. What is the base capital multiplier (m) applied to a bank's internal model market risk capital requirement whe
8. The Hill estimator is primarily used to provide a direct estimate of which parameter?
9. In the Kupiec Likelihood Ratio test, what does the null hypothesis (H_0) state?
10. In the context of backtesting a VaR model, what is a 'Type II error'?
11. If the exposure is $100,000 and the LGD is 50%, what is the implied Probability of Default (PD)?
12. If the estimated shape parameter ξ is found to be exactly zero, which specific distribution type does the mode
13. Under IFRS 9 accounting, 'Stage 1' assets require a provision based on:
14. Which of the following describes 'physical settlement' in a CDS contract?
15. Which component of a credit default swap represents the expected present value of the contingent payment made
16. For a highly rated AAA corporate bond, the EL is typically very low because:
17. Structural models generally require which set of primary inputs to estimate a firm's default probability?
18. In a standard single-name credit default swap (CDS) contract, which of the following best describes the primar
19. In a CDS valuation model, what does the 'Survival Probability' S(t) represent?
20. If a firm's leverage increases (Assets V stay same, Debt F increases), how does the Merton model predict the P
21. If an investor owns a bond and buys a CDS on that same bond from a highly rated bank, they have primarily elim
22. Which of the following events is generally considered a 'credit event' that would trigger the protection leg o
23. Which parameter in the EL formula is most likely to be affected by the presence of high-quality physical colla
24. In the Bow-Tie analysis framework, where do 'Preventive Controls' sit relative to the operational event?
25. A customer consistently deposits $9,800 in cash at three dif… — This behavior is a classic 'red flag' for whic
26. The Standardized Measurement Approach (SMA) formula is composed of two primary factors: the Business Indicator
27. In the Standardized Measurement Approach (SMA), the Business Indicator (BI) serves as a proxy for which of the
28. Under a proper governance framework, 'Model Limitations' must be:
29. Under the three pillars of model validation, which pillar is concerned with verifying that the model's underly
30. What is the marginal coefficient for the portion of the BI that exceeds 30 billion euros?

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