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Risk Management
FRM Part II Liquidity and Treasury Risk Exam Preparation
Study liquidity risk, leverage, reserves, intraday funding, stress testing, contingency planning, deposits, repo, transfer pricing, cross-currency funding, ALM and illiquid assets.
80 Unique Questions · 5 Mocks × 20 Detailed Study Notes Timed topic practice
Course syllabus information reviewed for 2026. Always check the awarding body’s latest official syllabus and candidate updates before booking or sitting your exam. Exams Academy is an independent education provider and is not affiliated with GARP.
Exactly what is included
- 5 mock exams × 20 questions · 80 unique questions · 100 total question slots · unlimited retakes
- Focus Learn · key areas, pitfalls, exam traps & key numbers
- Flashcards · fun, fast and effective recall
- Exam cheat sheet · key facts, rules and numbers by chapter
- Audio Learning · every chapter in audio
- AI Analyzer & Mentor · pinpoints your weak areas
- Study Mode Exams · learn while you train
- AI Chat trained specifically for this exam
- Community-polished data, improved every day
- Up-to-date, accuracy-checked content
AI Audio Summaries New
Listen to course modules on the go. Perfect for studying while driving or commuting.
🎧 Audio
* This is a chapter sample. All audio is available in the full version.
Syllabus
Module 1: Liquidity Risk
🎧 Audio
Market and funding liquidity, LVaR, regulation and liquidity black holes.
Module 2: Liquidity and Leverage
Funding structures, collateral markets, leverage, margins and systemic links.
Module 3: Early Warning Indicators
Forward-looking metrics, thresholds, dashboards and escalation.
Module 4: The Investment Function in Financial-Services Management
Money- and capital-market instruments, yield, duration and maturity strategies.
Module 5: Liquidity and Reserves Management
Asset, liability and balanced strategies; needs and reserve positions.
Module 6: Intraday Liquidity Risk Management
Payment timing, collateral, flows, stress and settlement utilities.
Module 7: Monitoring Liquidity
Cash-flow term structures, generation capacity and tail liquidity measures.
Module 8: The Failure Mechanics of Dealer Banks
Creditor and client flight, derivatives, settlement and policy response.
Module 9: Liquidity Stress Testing
Scope, horizon, scenarios, assumptions, outputs and governance.
Module 10: Liquidity Risk Reporting and Stress Testing
Deposit, mismatch, concentration, commitment and stress reports.
Module 11: Contingency Funding Planning
Triggers, gaps, actions, communication and operational readiness.
Module 12: Managing and Pricing Deposit Services
Deposit types, costs, insurance and relationship pricing.
Module 13: Managing Nondeposit Liabilities
Wholesale sources, funds gaps and source selection.
Module 14: Repurchase Agreements and Financing
Repo mechanics, rates, specials, haircuts and rollover risk.
Module 15: Liquidity Transfer Pricing
Matched-maturity pricing, cushions and contingent liquidity cost.
Module 16: The US Dollar Shortage in Global Banking
Global balance sheets, dollar mismatch and central-bank swap lines.
Module 17: Covered Interest Parity Lost
Cross-currency basis, hedging demand and limits to arbitrage.
Module 18: Asset-Liability Management and Duration
Repricing gaps, net interest margin, duration and convexity.
Module 19: Illiquid Assets
Stale pricing, biases, premiums, transaction costs and allocation.
Interactive preview
Free GARP FRM Part II — Liquidity and Treasury Risk Measurement and Management (Book 4) Practice Questions & Exam Preview
Try 15 GARP FRM Part II — Liquidity and Treasury Risk Measurement and Management (Book 4) practice questions from Liquidity, Treasury Funding and Asset-Liability Risk
Practice GARP FRM Part II — Liquidity and Treasury Risk Measurement and Management (Book 4) exam questions with answers and explanations. The full course includes 5 mock exams and complete syllabus coverage.
Exam Preview
Liquidity, Treasury Funding and Asset-Liability Risk
Which statement correctly explains Market liquidity?
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Flashcards
Card 1 of 10Chapter 1
Question
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Focus Learn
- Market liquidity
- Funding liquidity
- Bid-ask spread
- Market depth
- LVaR
- Optimal unwind
- Reserve requirements
- LCR
- NSFR
- Liquidity black hole
Chapter 1: Liquidity Risk
Direct answer
This chapter explains Liquidity Risk as part of the supplied FRM Part II liquidity and treasury risk book. The exam task is to identify the liquidity mechanism, choose the correct horizon and cash-flow definition, and test whether the proposed resource or control remains usable under stress. Liquidity answers should say who needs cash, in which currency and legal entity, at what time, against which collateral or market access, and what happens when normal assumptions fail.
Source-grounded recall
- Market liquidity: The ability to trade promptly in size with limited price impact.
- Funding liquidity: The ability to meet cash obligations when due.
- Bid-ask spread: A direct transaction-cost indicator of market liquidity.
- Market depth: The volume a…
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Preparation Package at a Glance
| Feature | Exams Academy | Details |
|---|---|---|
| Access Period | Lifetime Access | One-time enrollment with no recurring fee |
| Practice Exams | Unlimited Retakes | Five 20-question timed book-level mock exams |
| Study Support | Instant 24/7 AI Tutor | Self-service AI support; live instructor support is not included |
| Cost | $71 (One-Time) | One-time payment with no recurring subscription |
Preview & See What You Will Get
Frequently Asked Questions
No. This course covers the Liquidity and Treasury Risk printed book. Candidates also need the other Part II books and required Current Issues readings.
GARP describes Part II as 80 equally weighted multiple-choice questions completed in four hours across all Part II domains.
No. They are book-level topical practice at the official average pace.
No. GARP does not publish a fixed percentage pass mark. The platform uses 70% only as an internal mastery target.
No. Exams Academy is an independent education provider and is not affiliated with or endorsed by GARP.
You receive lifetime access with no recurring subscription fee.
Yes! Test your knowledge and review detailed explanations with the free GARP FRM Part II — Liquidity and Treasury Risk Measurement and Management (Book 4) Mock Exam Preview below. It contains 15 exam-style questions from one named topic; the full course provides complete mock exams and syllabus coverage.
Key Benefits
Five Timed Book-Level Mock Exams
Test all 19 chapters through five 20-question papers at the official Part II pace.
- ✓ 80 distinct questions across the first four papers.
- ✓ Mock 5 samples five questions from each earlier paper.
- ✓ Every answer includes a source-grounded explanation.
Liquidity and Treasury Risk AI Tutor
Clarify funding, collateral, stress, transfer-pricing and ALM relationships.
- ✓ Compare market and funding liquidity.
- ✓ Review repo, deposits and contingency actions.
- ✓ Work through cross-currency funding and duration gaps.
Active-Recall Revision
Strengthen memory with 210 flashcards and a 222-item searchable reference sheet.
- ✓ Ten focused cards per chapter.
- ✓ Twenty number-recall cards.
- ✓ Specific exam traps and close distinctions.
Detailed Chapter Summaries
Connect each liquidity measure with its horizon, assumptions, capacity and action.
- ✓ Monitoring, stress and contingency funding.
- ✓ Deposits, liabilities, repo and transfer pricing.
- ✓ Currency funding, ALM and illiquid assets.
Exam Format & Details
| Assessment | Book-level topical practice: 20 multiple-choice questions in 60 minutes. The official FRM Part II exam covers all Part II domains with 80 equally weighted questions in four hours. |
| Duration | 60 Minutes |
Focused preparation for FRM Part II Book 4
Liquidity and Treasury Risk Measurement and Management covers market and funding liquidity, leverage and collateral, early warning indicators, investment and reserve management, intraday liquidity, cash-flow monitoring, dealer-bank failure, stress testing, reporting, contingency funding, deposits, wholesale liabilities, repo, transfer pricing, dollar funding, the cross-currency basis, asset-liability management and illiquid assets.
This course keeps all 19 chapters together as one source-grounded book-level learning hub. Use 210 active-recall flashcards, a 222-item reference sheet, detailed chapter summaries, five timed mocks and the grounded AI tutor to learn the precise distinctions and mechanics.
The official FRM Part II exam contains 80 equally weighted multiple-choice questions across all Part II domains and lasts four hours. These 20-question, 60-minute papers preserve that pace but are not full Part II mocks. The 70% platform result is an internal mastery target, not an official GARP pass mark.
Who Is This For?
✓ Candidates preparing for the GARP FRM Part II examination
✓ Liquidity, treasury, ALM, funding and market-risk analysts
✓ Candidates completing and tracking each official Part II book separately
✓ Professionals strengthening stress-testing, repo and cross-currency funding skills
Preparation centre
GARP FRM Part II — Liquidity and Treasury Risk Measurement and Management (Book 4) Exam Guides
Use these connected guides for the syllabus, exam format, booking and revision strategy.
Ready to Pass Your Exam?
Master this FRM curriculum book with source-grounded summaries, active recall and clearly scoped book-level practice before combining it with the rest of the curriculum.
GARP FRM Part II — Liquidity and Treasury Risk Measurement and Management (Book 4)
$71 $220
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