FRM Syllabus and Subjects

Duration: 1 Year
Avg Fees: ₹1 LPA

As soon as you begin your FRM Certification, you will encounter the discipline that will teach you advanced Risk Management abilities. The curriculum is divided into two parts FRM Exam I and FRM Exam II. FRM course is for the aspirants wishing to excel in their knowledge and expertise in the financial risk management sector.

Semester Wise FRM Syllabus

The FRM course curriculum is categorized into two parts: FRM Exam I and FRM Exam II. The FRM course cover a wide range of risk analysis and management topics and are divided into two parts. The exam-by-exam FRM subjects list is listed below:

FRM Syllabus - Exam I

The table below contains the list of FRM subjects in Exam I:

FRM Level 1 Syllabus

Areas of Study

Topics

Foundation of Risk Management (FRM)

Basic Risk Types

Measurement and management tools

Creating Value with Risk Management

The role of Risk Management in Corporate Governance

Enterprise Risk Management

Financial Disaster and Risk Management Failure

The Capital Asset Pricing Model

Risk Adjusted Performance Measurement

Multifactor Models

Data Aggregation and Risk Reporting

Ethics and GRAP code of conduct

Quantitative Analysis (QA)

Discreet and Continuous Probability Distributions

Estimating the parameters of distributions 

Population and Sample Statistics 

Bayesian Analysis

Statistical inference and hypothesis testing

Estimating correlation and volatility using EWMA and GARCH models

Volatility term structures

Correlations and copulas

Linear regression and single and multiple regressors

Time series analysis and forecasting

Simulation methods

Financial Markets and Products (FMP)

Structure and functions of financial institutions

Structure and mechanics of OTC and exchange markets

Structure, mechanics, and valuation of forwards, futures, swaps and options

Hedging with derivatives

Interest rates and measures of interest rate sensitivity

Foreign exchange risk

Corporate bonds

Mortgage-backed securities

Valuation and Risk Models (VRM)

Value-at-Risk (VaR)

Expected shortfall (ES)

Stress testing and scenario analysis

Option valuation

Fixed income valuation

Hedging

Country and sovereign risk models and management

External and internal credit ratings

Expected and unexpected losses

Operational risk

FRM Syllabus - Exam II

The table below contains the list of FRM subjects in Exam II:

FRM Level 2 Syllabus

Areas of Study

Topics

Market Risk Measurement and Management (MR)

VaR and other risk measures

Parametric and non-parametric methods of estimation

VaR mapping

Backtesting VaR

ES and other coherent risk measures

Modelling dependence: correlations and copulas

Term structure models of interest rates

Volatility: smiles and term structures

Credit Rist Measurement and Management (CR)

Credit analysis

Default risk: quantitative methodologies

Expected and unexpected loss

Credit VaR

Counterparty risk

Credit derivatives

Structured finance and securitization

Operational and Integrated Risk Management

(OR)

Principles for sound operational risk management

ERM and enterprise-wide risk governance

IT infrastructure and data quality

Internal and external operational loss data

Methods of determining operational risk capital for regulatory purposes

Model risk and model validation

Extreme value theory (EVT)

Risk-adjusted return on capital (RAROC)

Economic capital frameworks and capital planning

Liquidity risk measurement and management

Failure mechanics of dealer banks

Stress testing banks

Third-party outsourcing risk

Risks related to money laundering and financing of terrorism

Regulation and the Basel Accords

Risk Management and Investment Management

(IM)

Factor theory

Portfolio construction

Portfolio risk measures

Risk budgeting

Risk monitoring and performance measurement

Portfolio-based performance analysis

Hedge funds

Current Issues in Financial Markets

(CI)

Credit loss provisioning, IFRS 9/CECL

Machine learning and ‘big data’

Central clearing and risk transformation

The failure of covered interest rate parity

FinTech credit

Corporate culture

FRM Course Structure

An FRM syllabus is often divided into Exam I and Exam II. The FRM course curriculum takes up to one academic year to complete. The FRM course subjects teach not only theoretical knowledge but also practical and interpersonal skills that are necessary. The following is a breakdown of the FRM Certification course structure:

  • One year
  • Two Level Of Exam
  • Seminars
  • Internship
  • Project Work

FRM Exam Pattern

The FRM exam consists of two-part with Part 1 consisting of 100 MCQs question and Part 2 consisting of 80 MCQs question. The duration of each exam is four hours. Below is a table highlighting the exam pattern:

Exam part

Number of questions

Type of questions

Duration

Part I

100

Multiple-choice questions (MCQs)

4 hours

Part II

80

FRM Teaching Methodology and Techniques

The teaching methods and techniques used for FRM Certification are unique. Students learn FRM subjects better when they are taught through practical lessons. To improve the effectiveness of instruction, FRM schools incorporate case studies, group projects, and other forms of action-based learning in addition to traditional lecture-based instruction. As a result, more knowledge about the theory and application of the course is acquired. The various teaching methods applied in the FRM Certification course are as follows:

  • Practical /Project sessions
  • Internship
  • Seminars
  • Regular Lectures

FRM Course Projects

The FRM Certification programme emphasises group projects and activities through project-based learning, which is a popular teaching method. Working on projects is primarily meant to make sure that students fully grasp the concepts. Some of the most typical financial risk management project topics include the following:

  • A Study on Scope and Adequacy of Risk Rating Models.
  • Analysis of Financial Statements for Credit Appraisal
  • Comparative Analysis of ULIPs Vs Mutual Funds
  • A Study on the Role of IT in enhancing banking services at The South Indian Bank Ltd
  • A Study on Credit facilities under Consortium/ Multiple Banking

FRM Study Material

Prospective candidates can utilise the numerous study materials that GARP has supplied to effectively prepare for FRM. This contains a variety of sources and forms, including:

  • Study materials for FRM: GARP publishes new study materials for FRM each year. After completing the FRM registration process, applications can download this study material.
  • Practice examinations for the FRM are made available by GARP to aspiring FRM candidates for both Parts I and Part II.
  • FRM Books: The topics listed in the FRM curriculum are covered by two sets of FRM books. Candidates can purchase these sets online. They are arranged into different sets for each of the two parts of the FRM exam. The FRM books are additionally accessible as ebooks.

FRM Books

Along with offering a basic understanding of the course, the GARP FRM books allow students to study their area of concentration in depth. Both online and offline access to the course textbooks is available to students. Before enrolling in the course, students should download the course information to fully understand the requirements so that they can make an informed choice.The following publications serve as the FRM course syllabus for the FRM Certification:

Name of Book

Author

The Essentials of Rist Management

Michel Crouhy, Dan Gal, Robert Mark 

A Practical Guide to Risk Management

Thomas S. Coleman

Financial Risk Management: A Practitioner’s Guide to Managing Market and Credit Risk

Steve L. Allen

Risk Management and Financial Institutions (Wiley Finance)

John C. Hull

Practical Methods of Financial Engineering and Risk Management: Tools for Modern Financial Professionals 

Rupak Chatterjee

 

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