GARP FRM® Examination Course Guide

Thank you for visiting our How to Pass the FRM Exam Guide page! Please take your time and go through each section carefully as there are many nuggets of useful information here to aid you in the ultimate goal of being allowed to bear the mark and become a Financial Risk Manager.

Afterwards, head on over to our Shop Page and view our books to beat the course!

 

Exam Dates

Part I and II Exam Date No. 1: Saturday, May 16, 2020

Part I and II Exam Date No. 2: Saturday, November 21, 2020

Note: A religious-alternative date by GARP is available upon request

 

Part I Fees: New Candidates

EARLY Registration (i.e. Register by Friday, January 31, 2020)

Enrollment Fee: US$400

Exam Registration: US$425

Total Cost: US$825

 

STANDARD Registration (i.e. Register by Saturday, February 29, 2020)

Enrollment Fee: US$400

Exam Registration: US$550

Total Cost: US$950

 

LATE Registration (i.e. Register by Wednesday, April 15, 2020)

Enrollment Fee: US$400

Exam Registration: US$725

Total Cost: US$1,125

 

Part I Fees: Returning Candidates

EARLY Registration (i.e. Register by Friday, January 31, 2020)

Enrollment Fee: US$0

Exam Registration: US$425

Total Cost: US$425

 

STANDARD Registration (i.e. Register by Saturday, February 29, 2020)

Enrollment Fee: US$0

Exam Registration: US$550

Total Cost: US$550

 

LATE Registration (i.e. Register by Wednesday, April 15, 2020)

Enrollment Fee: US$0

Exam Registration: US$725

Total Cost: US$725

 

Part II Fees: All Candidates

EARLY Registration (i.e. Register by Friday, January 31, 2020)

Enrollment Fee: US$0

Exam Registration: US$350

Total Cost: US$350

 

STANDARD Registration (i.e. Register by Saturday, February 29, 2020)

Enrollment Fee: US$0

Exam Registration: US$475

Total Cost: US$475

 

LATE Registration (i.e. Register by Wednesday, April 15, 2020)

Enrollment Fee: US$0

Exam Registration: US$650

Total Cost: US$650

 

Payment Deadlines

All relevant payments must be received by GARP before Midnight, New York Time

 

Payment Methods

GARP accepts the following types of payment routes:

Credit card: MasterCard, Visa, or American Express

Check: Drawn on a U.S. bank or an overseas check having a U.S. Intermediate Bank Wire

Wire: These instructions are printed at the bottom of your invoice

Special Note 1: A US$50 processing fee is applied for payments done through wire or check

Special Note 2: Please have your signature applied to all relevant documents and include your GARP ID and a copy of your invoice

 

Examination Structure

Both part 1 and part 2 are multiple-choice through use of pencil only.

Part 1 is 100 equally weighted questions.

While Part 2 is 80 equally weighted questions.

 

The Course Format

Exam Part I: Learn fundamental tools and techniques used in risk management and the theories that underlie their use. Your time to complete this is 4 hours or less.

The focus of the books include:

• Key concepts around risk management
• A Formulas and mathematically focused quantitative analysis
• General knowledge of the financial markets
• Risk modelling and their valuation

Exam Part II: Apply the tools and techniques covered in Part I and dive deeper in investment management and current market issues. Your available time to cover this section is 4 hours or less.

The focus includes the management and measurement of various areas such as: Credit and Market Risk, Issues being faced in today’s financial world, Operational Risk and Investment Risk.

 

Pass Rates

The pass rate for the FRM exam is normally between 40% and 50%.

 

Z-Table Information

A standard table is presented to you with the values for the cumulative distribution function. This is your standard ‘z-table’

As such, you are not expected to memorize CDF values.

You will also be given a list of common abbreviations used throughout the examination.

 

Study Time

Becoming a Financial Risk Manager isn’t an easy task and many do dream of having that FRM designation to propel them further in their industry.

As a result of the relatively low pass rates, you are expected to study for at least 250 hours.

However, we must tell you that some candidates have logged over 400 hours in preparing for each exam!

 

General Examination Period

Exams are offered in May and November of each year.

 

Exam Locations

The Exam is offered in approximately 90 sites over the world.

You may check the area nearest to you at www.garp.com

 

Sitting Frequency

Registration rules actually allow you to sit for the two exams within the same day.

Please note that part 1 level must be passed before part 2 is to be graded.

 

Allowed Persons

The Financial Risk Manager exam can be taken by anyone who desires to take it and the official books may be purchased by anyone who wishes to read them.

 

Educational Pre-requisites

There are no educational pre-requisites as the exam may be taken by anyone who desires to take it.

 

Language

The course is offered in English.

 

Additional Fees and Payments

Please visit GARP to see updated fee schedules and all general information with respect to becoming a Financial Risk Manager.

 

Refunds

GARP does not provide refunds for either the Exam Enrollment or Registration Fees.

 

Exam Transfer to another Candidate

Candidates for the Financial Risk Manager exam cannot transfer their registration to another candidate.

 

Exam Deferrals

You can defer your registration once to the next Exam date.

Second deferrals will not be considered.

A deferral to the next Exam date must be submitted by the last day of registration.

There is a $100 fee to defer.

 

Exam Violations

The truth is, this guide will be of no use if you do the wrong things on exam day!

The pass rate is already low enough so be sure to know the rules and regulations.

In addition to our study guide, below is a list of violations that have resulted in a candidate’s Financial Risk Manager Exam not being graded.

• Arriving after the doors were closed.
• Opening the examination booklet early.
• Starting the exam before “time to begin” was announced.
• Using a non-approved calculator during the Exam.
• Using a writing instrument that was not GARP issued on the Exam booklet and/or answer sheet (pen, pencil, or mechanical pencil).
• Having erasers, white-out, or correction fluid/tape, highlighters, or rulers.
• Being found with wearable technology devices such as Google glasses, smart-watches, a watch, a fit-bit, clocks, or portable clocks.
• Writing on the admission ticket or presented an admission ticket with writing on the back.
• Having a mobile cell phone in your possession.
• Being caught cheating or used books during the exam.
• Leaving with exam material(s) and/or admission ticket.
• Writing after the proctor announced “stop writing.”
• Communicating with another candidate during the Exam.

 

Paper Admission Ticket

You should not expect to gain admission to the Exam via a smartphone that contains an electronic copy of their Admission Ticket.

A paper Admission Ticket is required for you to enter the Financial Risk Manager Exam.

There are no exceptions to this!

 

Typical Exam Day Schedule

Once the Exam doors have closed, you will not be allowed to enter and sit for the examination .

There are no exceptions to this rule!

 

Sections and Weightings Covered by GARP

The Financial Risk Manager Program is designed to demonstrate your skills and knowledge in financial risk management:

Part I: Learn fundamental tools and techniques used in risk management and the theories that underlie their use.

Part II: Apply the tools and techniques covered in Part I and dive deeper in investment management and current market issues.

 

Exam I: Books 1 – 4

1. Foundations of Risk Management (20%)

2. Quantitative Analysis (20%)

3. Financial Markets and Products (30%)

4. Valuation and Risk Models (30%)

 

Exam II: Books 1 – 6

1. Market Risk Measurement and Management (20%)

2. Credit Risk Measurement and Management (20%)

3. Operational Risk and Resiliency (20%)

4. Liquidity and Treasury Risk Measurement (15%)

5. Risk Management and Investment management (15%)

6. Current Issues in Financial markets (10%)

 

To  continue our guide, we now turn our attention to a very important section dedicated to Exam Tips for repeating-or-first-time candidates.

 

Recommendations Before Taking the Exam

 

Set Aside Time

It is absolutely critical to maintain a good study guide.

Realizing that you don’t have enough time to cover all the study material necessary is one feeling that you cannot afford to have.

Setting out a time chart showing the exam dates, your work deadlines, personal and family commitments is a good way to make an assessment of the position that you’re in.

 

Target Weak Areas

Committing more time to your known weak areas and less time to your strong areas is always a good thing to do.

We encourage you to strive for balance.

 

Make a Calendar

Make markings on a large calendar and clearly write your study goals.

Show to-do’s, accomplishments and weak areas that require special focus.

Having markings for your work, personal & family commitments are also important.  And don’t forget to show the Financial Risk Manager exam date, time and where it is being held!

 

Set the Environment

Having a dedicated space that is conducive to concentrated study is also a good thing to have when preparing for such a challenging exam.

Try to get into an area that has as few distractions as possible (be it visual or audio distractions).

Some persons need their space to be extremely tidy, some need a certain type of music, and others need to have dead silence.

Knowing what works best for you is key.

 

Network

There can be several advantages to being part of a study group. You will be able to explain topics that you are strong in as well as hear from those that are strong in your weak areas.

If you ever find yourself in a group that is always going off-course to discuss unrelated matters or simply wasting precious time, then politely excuse yourself from such persons.

You should also consider talking to those persons who already received their FRM designation to find out a bit more on how they achieved it.

 

Eat Well & Hydrate

Be very weary of having high-sugar snacks before the exam, as you may feel energized for an hour-or-so but will have to deal with the energy crash that follows!

Have nutritious items such as yogurt, bananas etc. that will not cause a sudden spike your energy levels in a short time span but slowly releases it with time.

Having plenty of water throughout your study period will also be of benefit to your concentration abilities.

 

Exercise

Yes, exercise. Many students fall into the trap of saying time is short so they will have to cut things out such as daily exercise. This is a terrible mistake!

Regular exercise will improve the blood-flow to your brain and through the body, lower stress levels and help you tremendously in concentrating throughout the FRM course.

Whether it’s going to the gym, walking, jogging or swimming – just do it!

 

Take Time Off

Everyone is different, but many persons simply cannot study for extremely long periods of time and still do their regular day-to-day activities adequately.

Take time away and do something that will truly relax your body and mind.

Don’t feel guilty about spending a bit of time at the beach in the sun or sleeping a bit longer than usual over the weekend.

Having such breaks will almost-certainly rejuvenate your energy levels.

 

Practice, Practice, Practice

Going through all the study materials, your study guide, all potential exam questions available in your text and those available elsewhere is extremely important.

Exposing yourself to the various forms of exam questions will not only inspire confidence internally, but will ensure that you are a bit more settled under real-word exam conditions.

 

Sleep

Yes, having a good night’s sleep is one of the critical components of functioning at your peak.

So, set the alarm clock and sleep well.

 

Item Check

Be sure to carry what is necessary for the day. Your calculator, identification card, extra cash, stationary, a fully charged phone etc.

 

Recommendations During the Sitting of the Exam

 

Scan the Paper

It is generally beneficial to have a look-through of the entire paper, making markings of areas that are completely familiar and simple formulas that you can jot down quickly.

 

Read The Question Again

A simple request that many will not do. The course can be very deceptive.

This is such an important task that we cannot over-emphasize it enough.

 

Secure the Easy Ones

Going through the paper with a view to answer those questions that you are extremely strong/confident about is normally a good strategy. As, in the event of time running out, this ensures a securing of points that may make all the difference in the final outcome.

This approach will also build your confidence!

 

Review Your Paper

Assuming that this is possible, please carefully review all of your paper, even those that you may be very confident about.

 

Focus

We urge you to devote your full attention to your paper.

You must not worry about that lady who is asking for a ton of paper to write things on.

Do not concern yourself with what is happening on the outside.

Focus only on your desk and what’s in front of you.

 

Be Calm

Having unsettled nerves will not help you one bit. Have a good breakfast.

Plan the travel route beforehand and try to arrive at the examination center with plenty of time to spare.

Go to the bathroom one more time. If possible, sit in a quiet area, close your eyes and clear your mind, not thinking about any specific topic or question.

Avoid persons who are constantly complaining or stressing about the examination.

 

What To Do After Completing the Paper?

 

Treat Yourself!

You have gone through all the study materials. You dedicated yourself to passing both levels.

We can say you gave it your best and you still have your sights set squarely on achieving your goal of becoming a Financial Risk Manager.

Regardless of how you feel afterwards, take some time and care for yourself.

It may be a movie, a good book, spending time with a certain person or even playing a video game!

Just take some time away and be happy with your efforts.

 

Want More Information about the Course, Designation and other Exam Rules?

Do you know what calculator is accepted in the exam room?

Are you aware of all the necessary requirements to become a Financial Risk Manager?

Have you noted the exam dates on your calendar?

What to know more about the exam fee?

Get up to date and spend time on the official GARP website before your examinations!