Hard FRM Part 2 Practice Questions

62 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 Chief Risk Officer (CRO) is reviewing backtesting results… — What is the most likely structural cause for th
2. If the bank decides to hold economic capital equal to the 99.9th percentile of this annual distribution, which
3. A risk manager is utilizing the Peaks-over-Threshold (POT) framework to estimate tail risk for a hedge fund po
4. Building on the previous POT scenario (n= 5000, u= 20, N_u= 250, ξ= 0.40, β= 5.0), calculate the 99% Expected
5. What is the most likely impact on the bank's reported fair value of its derivatives portfolio and its Common E
6. A portfolio manager holds a two-asset portfolio with 60% in Asset A and 40% in Asset B. The individual standar
7. A bank's balance sheet shows total assets of 100 bn with a modified duration of DA = 5.0and total liabilities
8. A bank is calculating the Credit Valuation Adjustment (CVA) for a 2-year uncollateralized derivative. The expe
9. For a very large bank with BI = 200 billion, what is the 'average' coefficient (Total BIC / BI)?
10. An operational risk scenario analysis workshop quantifies a 'cyber-ransomware' event. The frequency is estimat
11. A hedge fund reports a 95% monthly VaR of $50 million. If the distribution of monthly returns is normal with a
12. If the 2-year vertex VaR is 0.92% and the 3-year vertex VaR is 1.48%, what is the interpolated VaR for a 4.63-
13. If the returns exhibit an autocorrelation of φ = 0.50, what is the corrected Sharpe ratio (assuming the risk-f
14. What primary balance (as a % of GDP) is required to stabilize the debt-to-GDP ratio?
15. If assets (A) are 120 billion and liabilities (L) are 100 billion, with σ_A = 11% and σ_L = 12%, by how much d
16. A bank’s balance sheet shows Assets (A) of $100 bn with duration D_A = 4.5 and Liabilities (L) of $90 bn with
17. If the spread has a mean of 60 bps and a volatility of 35 bps, what is the Liquidity-adjusted VaR (LVaR) using
18. A desk head argues that a position has 'zero risk' because i… — According to the risk decomposition framework
19. A CVA desk is computing marginal default probabilities for a 2-year window. The CDS-implied annual hazard rate
20. Calculate the Net Stable Funding Ratio (NSFR) for an entity with the following: Tier 1 Capital = 10 bn (ASF= 1
21. If the firm's EBITDA declines, when can the lender intervene?
22. Which tranche is considered 'Long Correlation' and why?
23. Which statement correctly identifies the distributional choice and its implications for data efficiency?
24. A bank finds its 'Earnings Lens' (NII sensitivity) and 'Econ… — What is the most likely structural cause of th
25. A stress test scenario provides a 'Recession Transition Matr… — If a bank uses this matrix in a Markovian M^9
26. According to the Fundamental Law of Active Management, a man… — If the manager starts making 400 bets per year
27. What is the risk contribution (RC) of Facility A to the total portfolio unexpected loss (UL_p)?
28. What is the estimated probability of a loss exceeding $20 m on any given day?
29. A risk manager is comparing 99% 1-day Historical Simulation… — Which statement best characterizes the behavior
30. If the bank uses a Credit Conversion Factor (CCF) of 50%, what is the Exposure at Default (EAD)?

Sign up free — drill hard FRM Part 2 questions with full explanations →