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On the other side, the only answer that said “the arranger should perform due diligence on the originator” was the adverse selection choice I believe; anyone recall?

I got your thinking and that’s how I proceed, but GARP practice exercises says is predatory lending/borrowing. See bellow:

Yeah time weight average default rate, got like 15,39%. same here, mezzanine behaved like equity

You are correct, I got that wrong lol

Can’t recall the letter sorry

I recall 14. It was adverse selection.

Yeah correct that table! You got it alright

Only stress PD was given

Correct, was just stressed PD since it was a loan portfolio.

Can’t recall the exact number sorry haha

Also picked correlation swap

Q9 I performed as you, we could get the correlation among them since we have the EL under normal conditions but if taken that correlation assumption to get Stress Loss the answers did not match any of the given ones. So the Stress Loss is just EL - ELs. ELs just taking PDs. yeah it was...

same here, worked in 1 & 2 LoD. In a serious organization 1LoD will never challenge their models, that’s a nonsense. How is the model development team gonna bring up weaknesses on their own models? They will try to cover up if so. that’s 2LoD job, challenge; it’s even on a the Guide to Internal...

Exactly, First Line of Defence doesn't challenge their own models; its 2LoD which does that (Risk Managers / Validation Unit) and after their "Ok" it gets approval.

The exam was tricky, totally agree. In this case the question mentioned for choice B that the CRO should be responsible for the escalation levels on the contingency plan, not the contingency plan itself. Thats why its choice B, it is on BT notes.

It can't be A. By selecting A you are telling the owners to challenge their own performance which is a complete lack of independency. Correct one was B.

Hi Nicole, Seats are limited only for the Part 1 correct? They are doing computer based exams If I recall correctly. Regards

Thanks a lot Nicole for the quick reply! I'll keep doing exercises until new ones come out. Regards

Hello, As I am starting doing exercises related to Market Risk; I find a light number of practice questions related to Correlation Risk. Seems like the Chapters 1, 2 and 5 (Meissner) are heavy to understand and I would like to know if BT is planning on adding more exercises? I remember doing...

Here also, FRM candidate lvl 2. Based in Spain.