FINANCIAL RISK MANAGEMENT (FRM) – DETAILED GUIDE WITH LATEST 2020

EXAM INFORMATION

The Financial Risk Management (FRM) exam, recognized by the Global Association of Risk Professionals
(GARP), is among the most comprehensive exams today for risk managers and finance professionals.

The reason behind its popularity is promising job potential and low fees compared to CFA exams and
MBA courses. From 23,391 FRM exam registration in 2009 to 68,397 registration in 2018, the total
number of FRM certified holders has increased by 192.41%. This number bestows the lateral growth of
risk management as a career.

FRM certification exam is covered in two parts – FRM Exam Part I and FRM Exam Part II, and first, a
candidate must appear and clear Part I before moving on to the Part II exam. A candidate can earn FRM
certification only after clearing both the levels of the FRM exam and illustrates two years of work
experience in the relevant industry. After this, Certified FRM professionals must be firmly in favor of
earning 40 hours of Continuing Professional Development (CPD) every two years to stay updated with
risk management dynamics.

FRM FEES STRUCTURE 2020

Below is the complete bifurcation of FRM certification cost:

FRM Exam Part I

New Candidate Returning Candidate
(May 16, 2020)

USD 825
USD 425
Early (FRM Enrollment Fee USD 400
(Only FRM Exam Registration Fees)
and Exam Registration USD 425)

Standard USD 950 USD 550

Late USD 1125 USD 725

FRM Exam Part II

New Candidate
(May 16, 2020)

Early USD 350

 (Only Exam Registration Fees)

Standard USD 475

Late USD 650

Note:

The FRM exam cost varies depending upon:

 The exam part you are taking

 Date of registration

 New and returning candidate

FRM SYLLABUS AND WEIGHTING

FRM Part I exam covers the following topic areas:

FRM Part I Topics Weight (in %)

Fundamentals of Risk Management 20

Quantitative Analysis 20

Financial Markets & Products 30

Valuation & Risk Models 30

FRM Part II exam covers the following topic areas:

FRM Part II Topics Weight (in %)

Market Risk Measurement 20

Credit Risk Measurement & Management (CR) 20

Operation Risk & Resiliency (ORR) 20

FRM EXAM PATTERN
Liquidity and Treasury Risk Measurement and Management (LTR) 15
FRM exam is conducted twice in a year, i.e. in May and November, and the result is declared 6 weeks
after
Risk the exam. Below
Management andisInvestment
the FRM exam pattern for(IM)
Management both the parts. 15
FRM Part I
Current Issues in Financial Markets (CI) 10
 Exam Duration – 4 hours
 
 Total questions – 100

 Question Type – Multiple Choice

 Marking – No negative marks

 Pass Percentage – Defined by the FRM Committee

FRM Part II

 Exam Duration – 4 hours

 Total questions – 80

 Question Type – Multiple Choice

 Marking – No negative marks

 Pass Percentage – Defined by the FRM Committee

FRM COURSE ELIGIBILITY

According to GARP, there are no predefined educational or professional prerequisites to appear for FRM
exams. However, candidates who appear for FRM exams need to be:

 Graduate

 MBA, CFA, CA, and/or CPA

Investment or finance professional

FREQUENTLY ASKED QUESTIONS (FAQS)

Q1. WHY SHOULD ONE GO FOR FRM EXAM?

Ans. Earning FRM designation has benefits like:

 Boost your knowledge and gain expertise in risk management

  Get involved with a global elite group of risk management professionals

 Fast track your career growth in risk and financial management sector

Q2. WHAT IS FRM EXAM PASS RATE COMPARED TO CFA EXAM PASS RATES?

Ans. Below table highlights the pass rates of FRM vs. CFA exams in the past 3 consecutive years:

Year FRM Exam Pass Rates CFA Exam Pass Rates

Level I – 41%
Level I – 42%
2019 Level II – 44%
Level II – 60%
Level III – 56%

Level I – 45%
Level I – 41%
2018 Level II – 45%
Level II – 50%
Level III – 56%

Level I – 43%
Level I – 42%
2017 Level II – 47%
Level II – 42%
Level III – 54%

Candidates can take both exams The fastest route for completing
Duration
on the same day all three levels is 18 months

Q3. WHAT IF I DON’T HAVE ANY PROFESSIONAL WORKING EXPERIENCE? CAN I STILL APPEAR FOR THE
EXAM?

Ans. Yes, you can appear for the FRM exam, even if you don’t have a work experience. After clearing
both exam levels, you can gain the required work experience (2 years) to use the FRM designation.

Q4. WHAT IF I FAIL IN FRM EXAM PART I?

Ans. If you, for some reason, couldn’t clear the Part I FRM exam, you can appear again by paying exam
registration fees.