FRM Part I · FRM Exam Part I · GARP Code of Conduct
Which statement best describes the primary purpose of the GARP Code of Conduct for FRM holders and GARP members?
The GARP Code of Conduct sets out ethical principles and professional standards that GARP members and FRM holders are expected to follow. It is about professional behavior, not about bank capital rules, exam scoring or mandated risk models.
- AIt sets out ethical principles and professional standards that members and certificate holders are expected to upholdCorrect
- BIt prescribes the minimum capital ratios that banks employing FRM holders must maintain
- CIt defines the pass mark and scoring method for the FRM exams
- DIt lists the quantitative models that risk managers must use when calculating Value at Risk
Explanation
The Code of Conduct provides ethical principles and professional standards for GARP members and certification holders. It does not set regulatory capital rules, exam scoring or required models. GARP publishes no pass mark, so the exam-scoring option is also wrong.
Did you get it right without looking?
One question tells you little. A timed set on GARP Code of Conduct shows your real accuracy, how long you take and where you lose marks.
More GARP Code of Conduct questions
- An FRM holder at a bank is offered an expensive all-expenses-paid trip by a software vendor shortly before the bank's model procurement deci…
- A GARP member working as a risk analyst at an asset manager learns during a vendor review that a client's confidential portfolio holdings ar…
- A risk manager believes a colleague, also a GARP member, has been manipulating stress test inputs to keep capital ratios above a regulatory …
- A GARP member is a risk consultant for two competing banks. While working for Bank A, she designs a stress-testing approach. Bank B then ask…
- A risk manager is preparing a model validation memo. Her analysis relies on a vendor's model whose key assumption she has not been able to v…
- An FRM charterholder working at an asset manager learns that a close friend at a listed company is about to announce a major loss. The infor…