Financial Risk Manager Exam

Financial Risk Manager (FRM®) exam is conducted by Global Association of Risk Professionals (GARP). The complete exam is divided into two parts – FRM Part 1 and FRM part 2. Exam is conducted twice a year, in May and November. Now let us discuss about FRM Part 1 and Part 2 separately.

FRM Part 1

• FRM Part 1 contains basic risk management topics like quantitative concepts, derivatives, value at risk (VaR), basics of risk management etc.
• The exam usually happens in morning hours from 8:00 AM to 12:00 PM.
• The question paper contains 100 questions which are to be answered in 4 hours.
• All the 100 questions are objective with 4 options each. The questions include both numerical as well as conceptual problems.
• There is no negative marking for wrong answer. So, if the candidate is not able to answer any question in exam, he/she should do an educated guess by looking at the options.

FRM Part 2

• FRM Part 2 contains advanced risk management topics like Credit Risk, Market Risk, Operational Risk, Portfolio and Integrated Risk Management, Current Issues.
• The exam usually takes place in the afternoon hours from 2:00 PM to 6:00 PM.
• The question paper contains 80 questions which are to be answered in 4 hours.
• All the 80 questions are objective with 4 options each. The questions include both numerical as well as conceptual problems.
• There is no negative marking for wrong answer.

Both FRM part 1 and Part 2 exams are conducted on same day, so it possible for the candidate to appear for both the parts in one day itself. Only GARP approved calculators are allowed in the exam. Texas Instruments BA II including BA II Plus Professional, Hewlett Packard 10B II, 10B II+, 20B, and 12C including HP 12C platinum and anniversary editions are allowed.

GARP offers FRM charter to candidates who successfully pass both the parts as well as complete minimum 24 months of work experience in the area of risk management. If the candidate passes both the exams and does not have the required work experience, he/she will not be eligible for the charter. Such candidates, after passing the exams, can gain required work experience to be eligible for FRM charter.