FRM Exam Guide With Latest 2020 Exam Information

Detailed FRM Exam Guide – 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.

Let’s begin with the FRM exam guide:

FRM Exam Guide and Fees Structure 2020

Below is the complete bifurcation of FRM certification cost:

 

FRM Exam Part I (May 16, 2020)	New Candidate	Returning Candidate
Early	USD 825 (FRM Enrollment Fee USD 400 and Exam Registration USD 425)	USD 425 (Only FRM Exam Registration Fees)
Standard	USD 950	USD 550
Late	USD 1125	USD 725

 

FRM Exam Part II (May 16, 2020)	New Candidate
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
​Liquidity and Treasury Risk Measurement and Management (LTR)	15
Risk Management and Investment Management (IM)	15
Current Issues in Financial Markets (CI)	10

 

FRM Exam Pattern

FRM exam is conducted twice in a year, i.e. in May and November, and the result is declared 6 weeks after the exam. Below is the FRM exam pattern for both the parts.

FRM Part I

• 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

FRM Exam Guide – Frequently Asked Questions (FAQs)

Q1. Why should one go for the 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
2019	Level I – 42% Level II – 60%	Level I – 41% Level II – 44% Level III – 56%
2018	Level I – 41% Level II – 50%	Level I – 45% Level II – 45% Level III – 56%
2017	Level I – 42% Level II – 42%	Level I – 43% Level II – 47% Level III – 54%
Duration	Candidates can take both exams on the same day	The fastest route for completing all three levels is 18 months

 

Q3. Can I use a calculator during FRM exam?

Ans. Yes, Texas instruments are allowed in the exam (BA II Plus / HP 10BII / HP 12C).

Q4. 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.

Q5. 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.