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. What is the most likely impact on the bank's reported fair value of its derivatives portfolio and its Common E
2. A bank is calculating the Credit Valuation Adjustment (CVA) for a 2-year uncollateralized derivative. The expe
3. A CVA desk is computing marginal default probabilities for a 2-year window. The CDS-implied annual hazard rate
4. Which tranche is considered 'Long Correlation' and why?
5. What is the risk contribution (RC) of Facility A to the total portfolio unexpected loss (UL_p)?
6. If the bank uses a Credit Conversion Factor (CCF) of 50%, what is the Exposure at Default (EAD)?
7. A stress test scenario provides a 'Recession Transition Matr… — If a bank uses this matrix in a Markovian M^9
8. Using the Euler allocation principle, what is the risk contribution of the second loan to the portfolio's tota
9. A credit analyst notes that a borrower's credit default swap… — What is the most likely fundamental interpreta
10. What is the strongest technically correct justification?
11. Which critique is correct?
12. The most accurate explanation is:
13. What primary balance (as a % of GDP) is required to stabilize the debt-to-GDP ratio?
14. If the firm's EBITDA declines, when can the lender intervene?
15. Which statement MOST accurately characterizes the irreducible economic difference that the fixed ISDA spread a
16. A bank's model validation team is performing 'effective chal… — What is the most defensible interpretation of
17. A bank's balance sheet shows total assets of 100 bn with a modified duration of DA = 5.0and total liabilities
18. If the spread has a mean of 60 bps and a volatility of 35 bps, what is the Liquidity-adjusted VaR (LVaR) using
19. A bank’s balance sheet shows Assets (A) of $100 bn with duration D_A = 4.5 and Liabilities (L) of $90 bn with
20. Calculate the Net Stable Funding Ratio (NSFR) for an entity with the following: Tier 1 Capital = 10 bn (ASF= 1
21. A bank finds its 'Earnings Lens' (NII sensitivity) and 'Econ… — What is the most likely structural cause of th
22. What structural feature of the balance sheet most likely explains this discrepancy?
23. A bank funds USD assets via 3-month swaps. If the 'Specialness' of a specific US Treasury bond increases (repo
24. If the 1-day 99% VaR is V_1d, which of the following statements correctly quantifies the relationship between
25. According to the Liquidity Coverage Ratio (LCR) composition caps, what is the total amount of HQLA the bank ca
26. Which statement most precisely identifies the structural distortion and its consequence?
27. From a contingent-liquidity-risk standpoint, what is the most important flaw this FTP design hides from the bu
28. Which critique BEST identifies the conceptual error in attributing the entire 250 bp to liquidity-buffer cost?
29. A Chief Risk Officer (CRO) is reviewing backtesting results… — What is the most likely structural cause for th
30. If the bank decides to hold economic capital equal to the 99.9th percentile of this annual distribution, which

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