Hard Frm Part 2 Practice Questions

93 free hard-difficulty Frm Part 2 questions, drawn live from KomFi's calibrated bank. These are the items that separate top scorers — every one carries a full explanation and trap analysis once you sign in.

1. A bank's internal model for Credit Value Adjustment (CVA) us… — Why is this required by regulatory and account
2. Which resource is typically the second to be utilized after the defaulting member's own initial margin is exha
3. A bank is calculating the Credit Valuation Adjustment (CVA) for a 2-year uncollateralized derivative. The expe
4. Which of the following describes the 'Debit Valuation Adjustment' (DVA) gain reported by banks during the 2008
5. Which of the following scenarios best exemplifies 'Specific Wrong-Way Risk'?
6. After the defaulting member's own initial margin is exhausted, what is typically the next layer of protection?
7. What is the appropriate confidence level for its internal Economic Capital (EC) model?
8. A CVA desk is computing marginal default probabilities for a 2-year window. The CDS-implied annual hazard rate
9. An institutional fund uses a Credit Default Swap (CDS) to hedge a reference entity. The 5-year par spread is 1
10. Which tranche is considered 'Long Correlation' and why?
11. If the bank adds a new trade to the set that is perfectly negatively correlated with the existing exposure, wh
12. What is the risk contribution (RC) of Facility A to the total portfolio unexpected loss (UL_p)?
13. A bank calculates its Credit Valuation Adjustment (CVA). Which of the following inputs must be used to ensure
14. If the bank uses a Credit Conversion Factor (CCF) of 50%, what is the Exposure at Default (EAD)?
15. If the underlying rating system is strictly Point-in-Time (PIT), how will the resulting cumulative PD likely b
16. If the manager holds a senior tranche with an attachment point of 15%, which pool is riskier for the senior in
17. A stress test scenario provides a 'Recession Transition Matr… — If a bank uses this matrix in a Markovian M^9
18. Using a flat-spread approximation, what is the estimated annual CVA charge in running terms?
19. Using the Euler allocation principle, what is the risk contribution of the second loan to the portfolio's tota
20. In the event of a member default that exhausts the defaulter's initial margin (IM), what is the next layer of
21. If the bank also holds $10m in cash collateral (variation margin) from the counterparty, what is the current n
22. In the context of Counterparty Credit Risk (CCR) under Basel III, why does the regulatory Exposure at Default
23. A credit analyst notes that a borrower's credit default swap… — What is the most likely fundamental interpreta
24. According to the BCBS standard for cryptoassets, a bank's to… — What is this limit?
25. What primary balance (as a % of GDP) is required to stabilize the debt-to-GDP ratio?
26. If the firm's EBITDA declines, when can the lender intervene?
27. A bank uses a black-box neural network for credit limit deci… — This phenomenon highlights which specific risk
28. How would a new $10 billion long-term mortgage (RSF factor 85%) funded by $10 billion in new core deposits (AS
29. A bank's balance sheet shows total assets of 100bn with a modified duration ofDA = 5.0and total liabilities of
30. A bank's 'Available Stable Funding' (ASF) includes 100m in retail deposits. If80m are classified as 'stable' a

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