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GARP ICBRR Exam Questions
International Certificate in Banking Risk and Regulation (ICBRR) (Page 37 )

Updated On: 19-Apr-2026
Page 14 of 70
PDF with 342 Questions

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



According to the largest global poll of foreign exchange market participants, which one of the following four global financial institutions was the most active participant in the global foreign exchange market?

  1. Citibank
  2. UBS AG
  3. Deutsche Bank
  4. Barclays Capital

Answer(s): C



In analyzing market option pricing dynamics, a risk manager evaluates option value changes throughout the entire trading day.
Which of the following factors would most likely affect foreign exchange option values?

I) Change in the value of the underlying
II) Change in the perception of future volatility
III) Change in interest rates
IV) Passage of time

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

Answer(s): D



Which one of the following four statements about the relationship between exchange rates and option values is correct?

  1. As the dollar appreciates relative to the pound, the right to buy dollars at a fixed pound exchange rate decreases.
  2. As the dollar appreciates relative to the pound, the right to buy dollars at a fixed pound exchange rate increases.
  3. As the dollar depreciates relative to the pound, the right to buy dollars at a fixed pound exchange rate increases.
  4. As the dollar appreciates relative to the pound, the right to sell dollars at a fixed pound exchange rate increases.

Answer(s): B



Which one of the following four statements does identify correctly the relationship between the value of an option and perceived exchange rate volatility?

  1. With increases in perceived future foreign exchange volatility, the value of all foreign exchange
  2. As the perceived future foreign exchange volatility decreases, the value of all options increases.
  3. As the perceived future foreign exchange volatility increases, the value of all options increases.
  4. Option values can only change due to the factors related to the demand for specific options

Answer(s): C



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