Financial Risk Manager (FRM)

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Exam Structure Part I

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Financial Risk Manager (FRM) is registered trade mark of Global Association of Risk Professionals

Agenda

Overview of FRM Program structure Exam structure Part I and Part II Part I Curriculum SimpliLearn Program Structure

Benefits of FRM certification

FRM PART I

Exam Structure

Overview

Financial Risk Manager (FRM)

The Global Association of Risk Professionals (GARP) certification - the Financial Risk Manager (FRM) is the globally recognized standard for those who manage risk.

Registration
Online Registration
(Link : http://www.garp.org/frm/frm-program.aspx )

No pre-requisite for registration

FRM Certification 2 years of work experience (Riskrelated full-time professional experience)

Part II Exam Part I Exam 4 Hours 100 MCQ 4 hours 80 MCQ

FRM PART I

Exam Structure

FRM Structure

FRM
(Twice a year. Third Saturday of May and Nov.)

FRM Part I

Foundations of Risk Management

Quantitative Analysis Financial Markets and Products Valuation and Risk Models Market Risk Management

FRM Part II

Credit Risk Management

Operational and Integrated Risk Management Risk Management and Investment Risk Management

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Exam Structure

About FRM Part I Exam

Part I of the FRM Exam covers the fundamental tools and techniques used in risk management and the theories that underlie their use.

20%
Foundations of Risk Management

20%
Quantitative Analysis

30%
Financial Markets and Products

30%
Valuation and Risk Models

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Exam Structure

FRM Part I Syllabus

Valuation and Risk Models

Financial Markets and Products

Foundations of Risk Management

Quantitative Analysis

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FRM Part I Sub-Topics

An understanding of the trade-off between risk and return Foundations of Risk Management (20%) Quantitative Analysis (20%) The construction of efficient portfolios Fundamental asset pricing models Enterprise risk management frameworks A review of major financial disasters Applications of the GARP Code of

Basic probability and statistics Monte Carlo methods Volatility forecasting models Value-at-Risk estimation Financial Markets and Products (30%)

Equities

Commodities
Currencies

Basic bond valuation Valuation using binomial trees

Valuation and Risk Models (30%)

Fixed income Equity options and other derivatives A basic understanding of arbitrage arguments related to the valuation

An understanding of the BlackScholes-Merton model Value-at-Risk

The contingent claims approach

Expected and unexpected loss estimation Stress testing

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More About FRM Part I Exam Study Guide

SimpliLearn Study Notes Duration Original Readings Prescribed by FRM Scoring FRM Exam Preparation Handbook Calculator 2012 FRM Study guide Only GARP-approved calculators allowed No negative marking 4 hours long

Result 2012 FRM AIM Statement

Pass/Fail. Quartile results are provided.

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Interpreting FRM Part I: AIM Statement

AIMS: Jorion, Philippe. Value-at-Risk: The New Benchmark for Managing Financial Risk : 3rd Edition (New York: McGraw-Hill, 2007). Chapter l ................................. The Need for Risk Management Candidates, after completing this reading, should be able to: Define risk and describe some of the major sources of risk. Differentiate between business and financial risks and give examples of each. Relate significant market events of the past several decades to the growth of the risk management industry. Describe the functions and purposes of financial institutions as they relate to financial risk management. Define what a derivative contract is and how it differs from a security. Define financial risk management. Define Value-at-Risk (VaR) and describe how it is used in risk management. Describe the advantages and disadvantages of VaR relative to other risk management tools such as stop-loss limits, notional limits, and exposure limits. Compare and contrast valuation and risk management, using VaR as an example. Define and describe the four major types of financial risks: market, liquidity, credit, and operational; and their forms. Links to download the desired study materials: http://www.garp.org/frm/study-center/study-materials.aspx

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Exam Structure

About SimpliLearn FRM Part I Tutorial

Program Hours
More than hours of E-learning videos 6 sets of question papers in original format

E-Learning

Supporting Material
Complete course divided into more than 45 lessons Supporting examples to understand the concept More than 25 supporting Excel spreadsheets

Continuously Updated
The program material is continuously updated to keep the modules relevant, intuitive and asp per the latest curriculum and GARP guidelines.

Updates
Get frequent updates on exam guidelines, difficulty, exam structure, pattern, relevant dates and news.

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SimpliLearn FRM Part I List of Tutorials

Foundations of Risk Management 1. The Need for Risk Management Quantitative Analysis 13. Review of Probability Financial Markets and Products 24. introduction - Options, Futures, and Other Derivatives 25. Mechanics of Futures Markets 26. Hedging Strategies Using Futures Valuation and Risk Models 37. Putting VaR to Work 38. Extending the VaR Approach to Operational Risks 39. Binomial Trees

2. Creating Value with Risk Management 14. Review of Statistics 15. Linear Regression with One 3. Delineating Efficient Portfolios Regressor 16. Regression with a Single Regressor: 4. The Standard Capital Asset Pricing Hypothesis Tests and Confidence Model Intervals 5. Nonstandard Forms of Capital Asset 17. Linear Regression with Multiple Pricing Models Regressors 6. The Arbitrage Pricing Model APT-A New 18. Hypothesis Tests and Confidence Approach to Explaining Asset Prices Intervals in Multiple Regression 7. Applying the CAPM to Performance Measurement: Single-Index Performance 8. Measurement Indicators 19. Discrete Probability Distributions 9. Overview of Enterprise Risk 20. Continuous Probability Management Distributions 10. Financial Disasters 21. Monte Carlo Methods 11. Risk Management Failures: What are 22. Estimating Volatilities and They and When Do They Happen Correlations

27. lnterest Rates 40. The Black-Scholes-Merton Model 28. Determination of Forward and Futures Prices 41. The Greek Letters 42. Bond Prices, Discount Factors, and 29. Interest Rate Futures Arbitrage 43. Bond Prices, Spot Rates, and Forward Rates 44. Yield to Maturity 45. One-Factor Measures of Price Sensitivity

30. Swaps 31. Properties of Stock Options 32. Trading Strategies Involving Options

12. GARP Code of Conduct

33. Commodity Forwards and Futures 46. The Rating Agencies 34. Fundamentals of Commodity Spot and Futures Markets: Instruments, Exchanges 23. Quantifying Volatility in VaR Models and Strategies 47. Country Risk Models

35. Foreign Exchange Risk

36. Corporate Bonds

48. External and Internal Ratings

49. Loan Portfolios and Expected Loss 50. Unexpected Loss 51. Measures of Financial Risk 52. 0perational Risk 53. Stress Testing 54. Principles for Sound Stress Testing Practices and Supervision 11

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Why Should One Go for FRM?

STAND OUT TO EMPLOYERS

DEVELOP YOUR KNOWLEDGE AND EXPERTISE

JOIN AN ELITE GROUP

DEMONSTRATE YOUR LEADERSHIP CONFIRM YOUR ACHIEVEMENTS ENHANCE YOUR REPUTATION

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Opportunities for FRM-Certified Professionals

Professionals

Career Changer

Students

Professionals who manage risk, money, or investments and want to broaden their knowledge of the different types of financial risk enter the FRM Program in order to enhance their current skill set.

Enhance your career opportunity and increase scope of your job opportunities by arming yourself with the highly professional and industry-wide recognized certification.

Students with an interest in finance may elect to sit for the FRM Exam during or immediately after completing their studies as a complement to their coursework.

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Insights from FRM 2011 Exam

FRM candidates came from 129 different countries There was a record 26,527 registrations for the FRM Exam

Top 10 countries/regions with the most FRM candidates: China, India, U.S., Hong Kong, South Korea, Canada, United Kingdom, Singapore, Taiwan, Switzerland

91% of candidates who sat for the November 2011 FRM Exam would recommend that their colleagues also sit for the FRM Exam

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Who is Hiring?
The top 20 companies employing the most Certified FRMs are:

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THANK YOU

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