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FRM Part I Practice Questions
Original practice questions for the Financial Risk Manager Part I (Global Association of Risk Professionals (GARP)), mixed across 4 topics with instant answers and explanations. Practise by topic below or take the timed mock test.
FRM Part I mixed practice
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Q1.Probability & CombinatoricsIn how many ways can the letters of the word PENCIL be arranged?
Show answer & explanation
Answer: B — 720
All 6 letters are different, so arrangements = 6! = 720.
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Q2.Accounting & FinanceThe CAPM expected return equals:
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Answer: A — Rf + β(Rm − Rf)
Capital Asset Pricing Model: risk-free rate + beta × market risk premium.
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Q3.Simple & Compound InterestFind the simple interest on $56,000 at 7.5% per annum for 2 years.
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Answer: B — $8,400
SI = P × R × T / 100 = 56,000 × 7.5 × 2 / 100 = $8,400.
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Q4.Averages & StatisticsThe average of 12 numbers is 68. If 95 is added, what is the new average?
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Answer: D — 70.08
Old total = 12 × 68 = 816. New total = 816 + 95 = 911; new average = 911/13 = 70.08.
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Q5.Probability & CombinatoricsIn how many ways can a committee of 3 be chosen from 7 people?
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Answer: C — 35
Order does not matter → combinations: 7C3 = 7! / (3!·4!) = 35.
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Q6.Accounting & FinanceFind the present value of $1,700 received at the end of each year for 5 years at 8%.
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Answer: D — $6,788
PV of an ordinary annuity = PMT × [1 − (1 + r)⁻ⁿ]/r = 1,700 × 3.9927 = $6,788.
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Q7.Simple & Compound InterestFind the simple interest on $35,000 at 5% per annum for 5 years.
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Answer: D — $8,750
SI = P × R × T / 100 = 35,000 × 5 × 5 / 100 = $8,750.
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Q8.Averages & StatisticsThe average of 12 numbers is 62. If 89 is added, what is the new average?
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Answer: B — 64.08
Old total = 12 × 62 = 744. New total = 744 + 89 = 833; new average = 833/13 = 64.08.
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Q9.Probability & CombinatoricsTwo fair dice are thrown. What is the probability that the sum is 8?
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Answer: A — 5/36
5 of the 36 equally likely outcomes give a sum of 8, so P = 5/36 = 5/36.
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Q10.Accounting & FinanceThe time value of money means:
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Answer: D — A sum today is worth more than the same sum in the future
Money available now can be invested to earn a return.
About FRM Part I
Financial Risk Manager Part I — conducted by Global Association of Risk Professionals (GARP). Foundations of risk management, quantitative analysis, markets and valuation.
Original practice questions written for this site in the style and difficulty of each exam’s syllabus. They are not past papers and the site is not affiliated with any exam body. Exam patterns, marking schemes and syllabi change — always check the latest official notification.
Practise by topic
- Probability & Combinatorics questions — Probability = favourable ÷ total outcomes.
- Accounting & Finance questions — Master the accounting equation, the three financial statements and time value of money: FV = PV(1 + r)ⁿ, PV of an annuity = PMT × [1 − (1 + r)⁻ⁿ]/r.
- Simple & Compound Interest questions — Simple interest grows linearly (PRT/100); compound interest multiplies by (1 + r/100) each period.
- Averages & Statistics questions — Average × count = total: most average questions are really about totals.
- FRM Part I mock test — 25 timed questions.
FRM Part I practice topics
| Topic | Section | Question source |
|---|---|---|
| Probability & Combinatorics | Mathematics | Calculated (new numbers every set) |
| Accounting & Finance | Finance | Calculated + question bank |
| Simple & Compound Interest | Quantitative aptitude | Calculated (new numbers every set) |
| Averages & Statistics | Quantitative aptitude | Calculated (new numbers every set) |