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GARP ICBRR Exam
International Certificate in Banking Risk and Regulation (ICBRR) (Page 2 )

Updated On: 1-Feb-2026
Page 2 of 70
PDF with 342 Questions

Which one of the following four statements correctly defines credit risk?

  1. Credit risk is the risk that complements market and liquidity risks.
  2. Credit risk is a form of performance risk in contractual relationship.
  3. Credit risk is the risk arising from execution of a company's strategy.
  4. Credit risk is the risk that summarizes the exposures a company or firm assumes when it attempts to operate within a given field or industry.

Answer(s): B



Which one of the following four statements correctly describes an American call option?

  1. An American call option gives the buyer of that call option the right to buy the underlying instrument on any date up to and including the expiry date.
  2. An American call option gives the buyer of that call option the right to sell the underlying instrument on any date up to and including the expiry date.
  3. An American call option gives the buyer of that call option the right to buy the underlying instrument on the expiry date.
  4. An American call option gives the buyer of that call option the right to sell the underlying instrument on the expiry date.

Answer(s): C



Which one of the following four statements correctly defines a non-exotic call option?

  1. A call option gives the call option buyer the obligation, but not the right, to buy the underlying instrument at a known price in the future.
  2. A call option gives the call option buyer the obligation, but not the right, to sell the underlying instrument at a known price in the future
  3. A call option gives the call option buyer the right, but not the obligation, to buy the underlying instrument at a known price in the future
  4. A call option gives the call option buyer the right, but not the obligation, to sell the underlying instrument at a known price in the future

Answer(s): C



An options trader is assessing the aggregate risk of her currency options exposures. As an options buyer, she can potentially ___ lose more than the premium originally paid. As an option seller, however, she has a ___ risk on the contract and always receives a premium.

  1. Never, unlimited
  2. Sometimes, unlimited
  3. Never, limited
  4. Sometimes, limited

Answer(s): A



Which one of the following four options is NOT a typical component of a currency swap?

  1. An initial currency exchange of the notional amount
  2. Denomination of the original notional amount into a foreign currency
  3. Periodic exchange of interest payments in different currencies
  4. A final currency exchange

Answer(s): B



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