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GARP ICBRR Exam
International Certificate in Banking Risk and Regulation (ICBRR) (Page 25 )

Updated On: 1-Feb-2026
Page 14 of 70
PDF with 342 Questions

A credit analyst wants to determine a good pricing strategy to compensate for credit decisions that might have been made incorrectly.
When analyzing her credit portfolio, the analyst focuses on the spreads in each loan to determine if they are sufficient to compensate the bank for all of the following costs and risks EXCEPT.

  1. The marginal cost of funds provided.
  2. The overhead cost of maintaining the loan and the account.
  3. The inherent risk of lending to this borrower while providing a return on the risk capital used to the support the loan.
  4. The opportunity cost of risk-adjusted marginal cost of capital.

Answer(s): D



From the bank's point of view, repricing the retail debt portfolio will introduce risks of fluctuations in:

I) Duration
II) Loss given default
III) Interest rates
IV) Bank spreads

  1. I
  2. II
  3. I, II
  4. III, IV

Answer(s): D



Altman's Z-score incorporates all the following variables that are predictive of bankruptcy EXCEPT:

  1. Return on total assets
  2. Sales to total assets
  3. Equity to debt
  4. Return on equity

Answer(s): D



Counterparty credit risk assessment differs from traditional credit risk assessment in all of the following features EXCEPT:

  1. Exposures can often be netted
  2. Exposure at default may be negatively correlated to the probability of default
  3. Counterparty risk creates a two-way credit exposure
  4. Collateral arrangements are typically static in nature

Answer(s): D



All of the following performance statistics typically benefit country's creditworthiness EXCEPT:

  1. Low unemployment
  2. Low inflation
  3. High degrees of investment
  4. Low degrees of savings

Answer(s): D



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