GLOBAL ASSOCIATION OF RISK PROFESSIONALS = e Financial Risk Manager (FRM®°) Examination ol 2010 Practice Exam PART / PART IlTABLE OF CONTENTS: Www. Vivichess« {© GARR Global Associton of ik Pfesionds, Inc, 2010 It isilega to repre the mater in an format without prior witten approval of GARP, Gaba Asocition of Rsk Profs 2010 FRM Examination Practice Exam ! PART LJ PART I Introduction 2010 FRM Practice Exam Part Candidate Answer Sheet . 2010 FRM Practice Exam Part Questions 2010 FRM Practice Exam Part Correct Answer Sheet . 2010 FRM Practice Exam Part ‘Answers and Explanations . org a cure Cucstions Penta ereneteenresenteens st 2010 FRM Practice Exam Parti Correct Answer Sheet. 2010 FRM Practice Exam Parti ‘Answers and Explanations .INTRODUCTION The FRM® Exam is practioreted examination ts questions are desived from a combination of theory a set fot nthe cae readings, and “real. word” werk experience. Gndidats ar expected to understand tisk management concepts and approaches and how they would apoy to a risk manager's day-to-day activities The FRM Examination is also a comprehensive examination, testing a risk professional on a number of rsk management concepts and approaches. It is very rae that a risk manager will be faced with an issue that can immediatly be slotted into one category. the rel world, a risk manager must be able to identity ary numberof rsk-eated issues and be able to deal wth them effectively ‘The 2010 FRM Practice Exams | andi have been developed to aid ‘candidates in thelr preparation forthe FRM Examination in November 2010. These practice exams are based on a sample of questions from the 2009 FRM Examination and are representative ofthe questions that will be inthe 2010 FRM Examination, Wherever necessary and possible, questions, answers and references have been updated to better reflect the topics and coe reaings listed in the 2010 FRM Examination Study Guide, The 2010 FRM Practice Exam | for Part and the 2010 FRM Practice Exam I for Part leach contain 40 multiple-choice questions. Note thatthe 2010, FRM Examination will consist of a morning and afternoon sesion, each, containing 70,multiplechoice questions. The practice exams were designed, tobe shorter to allow candidates to calibrate then preparedness without ‘being overwhelming, ‘The 2010 FRM Practice Exam for Pat daes not necessarily cover all topics to be tested in the 2010 FRM Examination, For a complete lst of topics and core readings, candidates should refer to the 2010 FRM Examination ‘Stucy Guide, Core readings were selected by the FRM Committee to assist ‘candidates in their review of the subjects covered by the exam. Questions for the FRM examination ate derived from the “core” readings. tis stongly suggested that candidates review these readings in depth prior to siting forthe exam, 2010 FRM Examination Practice Exam ! PART LJ PARTI Suggested Use of Practice Exams ‘To maximize the effectveness of the practice exams, candidates ae encour- ‘aged to follow these recommendations 41. Plan a date and time to take each practice exam. Set dates appro- pristely to give sufficient studyirevew time forthe practice exam and prior to the actual exam, 2 Simulate the test environment as closely as possible, 4+ Take each practice exam ina quiet place ‘Have only the practice exam, candidate answer sheet, calculator, and writing instruments (pencils, erasers) avaiable ‘© Minimize possible distraction from other peopl, cll phones and study material ‘+ Allocate 90 minutes for the practice exam and set an alarm to alert you when 90 minutes have passed, Complete the exam but note the questions answered after the 90 minute mark ‘© Follow the FRM calculator policy. You may only use aTexas| Instruments BAI Pus (inluing the BA I Plus Professional) calculator ora Hewlett Packard 12C (including the HP 12 Platinum) calculator. 3. After completing the practice exam, © “Calulateyour score-by comparing your answer sheat with the ‘ract¢e exam ansiver Ry. Only incluce Questions completed inthe first 99 minutes. ‘+ Use the practice exam Answers and Explanations to betteFunder- stand correct and incect answers and to identify topics that require akltional review. Consult referenced core readings to prepare for exam, ‘+ Passfall status for the actual exam i based on the distribution of scores from all candidates, so use your scores only to gauge your ‘own progress and preparedness.