Header Ads

FRM Syllabus 2018 Part 1/2 Financial Risk Management (FRM) Topic-Wise Syllabus


FRM Syllabus

FRM Syllabus 2018: Aspirants who have planned to appear in FRM exam are informed that the Topic-Wise FRM syllabus for Part 1/2 is available on this page. Financial Risk Management syllabus aims to build strong foundation which is helpful for the candidates to understand the basic concepts in FRM.

Candidates can acquire the format of the exam from the downwards section. You may go through the topic wise FRM syllabus and start your preparation according to the latest and updated FRM syllabus.

FRM syllabus is broken down into two parts and you can acquire the detailed description of both the parts from this single page that is well organized by the team of www.privatejobshub.in.
To check the topic wise weightage of the FRM exam 2018, you may have a look on the table provided on the underneath section of this page.

FRM syllabus

FRM part 1 syllabus:

1. Foundations of Risk Management (20%)

This part focuses on aspirants’ knowledge of foundational concepts of risk management and how they can add value to the organization and includes:
  • An understanding of corporate risk governance and the trade-off between risk and return
  • The construction of efficient portfolios
  • Fundamental asset pricing models
  • Enterprise risk management frameworks
  • Data quality management
  • A review of major financial disasters
To emphasize the importance of ethics as a fundamental requirement for sound risk management, applications of the GARP Code of Conduct to professional situations are covered in this section as well.

2. Quantitative Analysis (20%)

This part tests candidate’s knowledge of basic probability and statistics, regression and time series analysis, and various quantitative techniques useful in risk management such as:
  • Monte Carlo methods
  • Volatility forecasting models
  • Value-at-Risk estimation
3. Financial Markets and Products (30%)

This area tests the candidate’s knowledge of financial products and the markets in which they trade, other things included in this are:
  • Futures and forwards
  • Equity options, swaps, and other derivatives
  • Commodities
  • Currencies
  • Corporate bonds and interest rates
  • A basic understanding of arbitrage arguments and hedging related to these financial products.
Do You Know? Shortcuts To Prepare For Exam Quickly

4. Valuation and Risk Models (30%)

This area tests candidate’s knowledge of valuation techniques and risk models. This also includes:
Basic bond valuation and bond hedging
  • Valuation using binomial trees
  • An understanding of the Black-Scholes-Merton model
  • Value-at-Risk (VaR)
  • Expected and unexpected loss estimation
  • Stress testing
Want help in Preparation? Get Tips: Practice Which Helps In Preparation

FRM part 2 syllabus

Part II of the FRM Exam further applies the tools and techniques covered in Part I and explore more deeply into major sub-areas of risk management. Other important things included in this are:

1. Market Risk Management (25%)

This section tests candidate’s knowledge of management techniques and market risk measurement. These include:
  • Fixed-income interest rate sensitivities
  • Volatility exposures
  • Value-at-Risk (VaR) and back testing VaR
  • Expected shortfall (ES)
  • Correlations and copulas
  • Parametric and non-parametric estimation methods
  • Extreme value theory (EVT)
  • Exotic options and mortgage-backed securities
Check Here: How Students Can Manage Their Study Timing

2. Credit Risk Management (25%):

This part will test the candidate’s understanding of credit risk management with some focus given to structured finance and credit products such as collateral debt obligations and credit derivatives. Knowledge of counter party risk as well as default risk and methodologies used to measure it, such as Credit VaR will also be tested.

3. Operational and Integrated Risk Management (25%)

This section of FRM Part 2 syllabus is to check the candidate’s knowledge of two areas of increasing importance for many firms—operational risk management and integrated risk management. This includes:
  • Coverage of the tools and techniques necessary to measure, manage, and mitigate operational risk
  • Economic capital allocation
  • Enterprise risk management (ERM)
  • Knowledge of critical issues related to liquidity risk management, model risk, loss data modelling and IT infrastructure, stress testing, and risk appetite
  • Importantly, this section also tests a candidate’s knowledge of key regulations and the major international regulatory frameworks relevant to risk managers today, such as Basel.
Read Here: How To Make A Study Plan For Exam

4. Risk Management and Investment Risk Management (15%)

Through this part a candidate’s knowledge of risk management techniques applied to the investment management process will be tested. Topics such as portfolio construction and performance analysis are covered, as well as risk budgeting and portfolio and component VaR. Issues related to hedge funds and private equity investments are also covered.

5. Current Issues in Financial Markets (10%)

In this part, the candidates are expected to familiarize themselves with the readings, approaching each paper critically as a risk manager equipped with the knowledge from the other sections. This part of the Exam will test candidate’s knowledge of the material covered by each paper. Topics included in this part are:
  • Sovereign Risk and Financial Crisis
  • Flash Crash
  • Financial Innovation and Its Issues
Do You Know? How To Study At The Last Minute For Exams

FRM Exam Topic-Wise weightage:
  • Exam will have 100 MCQs in part I and part II comprises of 80 MCQs respectively. Below given table will give you topic wise weightage of each part.
  • There is no negative marking in FRM exam that is there is no additional deduction in the marks for any wrong attempted answers.
FRM Exam
FRM Part 1
FRM Part 2
Foundations of Risk Management
Market Risk
Quantitative Analysis
Credit Risk
Financial markets and Products
Operational Risk
Valuation and Risk models
Risk Management and Investment Management

Current Issues in Financial market

Last Words:

Candidates who wish to acquire further information in concern of FRM Syllabus 2018, they are suggested to stay connected with this page. To get the free email alerts instantly in your mail box, you can subscribe to www.privatejobshub.in.

You may also press Ctrl + D keys to bookmark this page or follow us on Facebook and Google Plus to get the notification directly on your timeline. For any information regarding FRM level 1 syllabus and FRM level 2 syllabus, you may ask us in the comment box.

All your queries related to FRM course syllabus FRM exam syllabus will soon be solved by the experts of our team.

Have A Look On Below Links

No comments

Don't Add Comment with Spam Purpose

Powered by Blogger.