People are gaining advanced knowledge through short term courses in Finance or FRM certification. This certification program is a medium to prove financial knowledge and professional skills and be at par with the experts employed in the leading multi-national companies and institutions across the world. Anyone interested in becoming an FRM can register for the FRM exam. The FRM EXam conducts two tests and is conducted by the Global Association of Risk Professionals (GARP). The exam will be conducted on two different occasions and dates. In this blog, you will read every detail regarding the FRM Exam.
This Blog Includes:
FRM Exam 2021
|Test Name||FRM Exam|
|Conducted By||Global Association of Risk Professionals (GARP)|
|Exam Cost||US$ 1900|
|Eligibility||No eligibility criteria|
|Exam Dates||May 08,2021- May 21, 2021
July 10, 2021- July 23, 2021
|Latest Exam Pass Rates||FRM I: 45.9%
FRM II: 58.6%
An FRM Certificate is a proof that you are a certified Financial Risk Manager. In order to receive this certificate, you need to:
- Pass Level 1 FRM Exam
- Pass Level 2 FRM Exam
- Show at least 2 years of work experience
It is important to note that if you have more than ten years of experience before passing Level 2 FRM exam, you will not be eligible for the certificate.
What is a Certified FRM?
Financial Risk Manager or FRM is a globally recognized certification provided by the Global Association of Risk Professionals (GARP) who through the FRM exam identify the potential candidates having specialized knowledge in evaluating the organization’s risk and can develop various strategies and approaches to minimize the impact. Apart from predicting the amount of risk, an FRM is responsible for identifying threats to the assets and the earning propensity of the organization. The Financial Risk Management professionals are mostly employed in major banks, asset management firms, accounting firms, insurance companies, regulatory agencies, etc.
Also read: CFA Course
Registering for the FRM Exam is very simple and easy. You can directly register through the website of GARP. Here are the important details that you need to know to fill the registration form:
- Go to the GARP website registration portal.
- Select the Exam Selection
- If you are only interested in taking the FRM Part 1 exam, select that. Otherwise, select FRM Part 1 and Part 2.
- Please note that you will not receive FRM certification without qualifying exam 2.
- Select the examination dates that suit you.
- Select your country, and fill other details.
- Ebooks for preparation will be available to you as a part of registration. However, if you wish to buy a hardcopy, you can do that.
- Select all the important criteria, pay your examination fee.
- You will be registered for the exam.
FRM Exam Dates 2021
Here are the important dates that you need to know for applying in 2021.
FRM Exam Date – May 2021
|Registration||December 2020- March 31, 2021|
|Exam Scheduling for Part I||May 08- 21, 2021
July 10- 23, 2021
May 15, 2021
|Exam Scheduling for Part II||May 15, 2021|
|Part I Exam||May 2021
|Part II Exam||May 2021|
FRM Exam November 2021
|Registration||May 1 – September 30, 2021|
|Exam Scheduling for Part I||November 13-26, 2021|
|Exam Scheduling for Part II||December 4-10, 2021|
|Part I Exam||November 2021|
|Part II Exam||December 2021|
The fees for FRM exam depends on the exam and duration you choose. Here is a detailed format of the fees for FRM exams.
- Registration Fees For Early Candidates (Before January 31, 2021)
|New Candidate for Exam I||US$ 950 (Including US$ 400 Enrollment Fees)|
|Returning Candidate for Exam I||US$ 550|
|Candidate for Exam II||US$ 550|
- Registration Fees For Regular Candidates (After January 31, 2021 till March 31, 2021)
|New Candidate for Exam I||US$ 1150 (Including US$ 400 Enrollment Fees)|
|Returning Candidate for Exam I||US$ 750|
|Candidate for Exam II||US$ 750|
- Other Fees
|Charges for Hard copy of Books||US$ 300|
|Membership Fees for GARP (Annual)||US$ 195|
FRM Exam Pattern 2021
The FRM test is an offline, pen and paper-based examination which is held twice a year across the globe. Held in the months of May and November, the test is conducted solely in the English language. The FRM syllabus is divided into 2 parts: FRM Exam Part 1 and FRM Exam Part 2. Given below is a summary of the important details related to both the papers:
FRM Exam Part 1
This part of the FRM exam is the first challenge towards realizing your dream as a Financial Risk Manager. Conducted in the morning shift, the paper consists of 100 MCQs which have to be completed within 4 hours. The major topics included in part 1 have been listed below:
Foundations of Risk Management
- Chapter 1. The Building Blocks of Risk Management
- Chapter 2. How Do Firms Manage Financial Risk?
- Chapter 3. The Governance of Risk Management
- Chapter 4. Credit Risk Transfer Mechanisms
- Chapter 5. Modern Portfolio Theory (MPT) and the Capital Asset Pricing Model (CAPM)
- Chapter 6. The Arbitrage Pricing Theory and Multifactor Models of Risk and Return
- Chapter 7. Principles for Effective Data Aggregation and Risk Reporting
- Chapter 8. Enterprise Risk Management and Future Trends
- Chapter 9. Learning from Financial Disasters
- Chapter 10. Anatomy of the Great Financial Crisis
- Chapter 11. GARP Code of Conduct*
- Chapter 1. Fundamentals of Probability
- Chapter 2. Random Variables
- Chapter 3. Common Univariate Random Variables
- Chapter 4. Multivariate Random Variables
- Chapter 5. Sample Moments
- Chapter 6. Hypothesis Testing
- Chapter 7. Linear Regression
- Chapter 8. Regression with Multiple Explanatory Variables
- Chapter 9. Regression Diagnostics
- Chapter 10. Stationary Time Series
- Chapter 11. Nonstationary Time Series
- Chapter 12. Measuring Returns, Volatility, and Correlation
- Chapter 13. Simulation and Bootstrapping
Financial Markets and Products
- Chapter 1. Banks
- Chapter 2. Insurance Companies and Pension Plans
- Chapter 3. Fund Management
- Chapter 4. Introduction to Derivatives
- Chapter 5. Exchanges and OTC Markets
- Chapter 6. Central Clearing
- Chapter 7. Futures Markets
- Chapter 8. Using Futures for Hedging
- Chapter 9. Foreign Exchange Markets
- Chapter 10. Pricing Financial Forwards and Futures
- Chapter 11. Commodity Forwards and Futures
- Chapter 12. Options Markets
- Chapter 13. Properties of Options
- Chapter 14. Trading Strategies
- Chapter 15. Exotic Options
- Chapter 16. Properties of Interest Rates
- Chapter 17. Corporate Bonds
- Chapter 18. Mortgages and Mortgage-Backed Securities
- Chapter 19. Interest Rate Futures
- Chapter 20. Swaps
Valuation and Risk Models
- Chapter 1. Measures of Financial Risk
- Chapter 2. Calculating and Applying VaR
- Chapter 3. Measuring and Monitoring Volatility
- Chapter 4. External and Internal Credit Ratings
- Chapter 5. Country Risk: Determinants, Measures, and Implications
- Chapter 6. Measuring Credit Risk
- Chapter 7. Operational Risk
- Chapter 8. Stress Testing
- Chapter 9. Pricing Conventions, Discounting, and Arbitrage
- Chapter 10. Interest Rates
- Chapter 11. Bond Yields and Return Calculations
- Chapter 12. Applying Duration, Convexity, and DV01
- Chapter 13. Modelling Non-Parallel Term Structure Shifts and Hedging
- Chapter 14. Binomial Trees
- Chapter 15. The Black-Scholes-Merton Model
- Chapter 16. Option Sensitivity Measures: The “Greeks”
Related Read: How to Pursue CA After Graduation
FRM Exam Part 2
Only those who qualify for the FRM exam part 1 are eligible to appear for the 2nd level of the certification course. It comprises 80 multiple choice questions which evaluate the candidates on the basis of the application of the knowledge gained in the first part of the exam. The part 2 test is held in the afternoon shift and has the same time limit as part 1 i.e. 4 hours. Following are the topics included in this level of the test:
- Market Risk Measurement and Management
- Credit Risk Measurement and Management
- Liquidity and Treasury Risk Measurement and Management
- Operational Risk and Resiliency
- Risk Management and Investment Management
- Current Issues and Financial Markets
Note: If a candidate wishes to take the FRM exam part 2 on the same day after completing part 1 then, the answers of part 2 examination will be evaluated by GARP only after one obtains passing marks in the first part. Further, there is no negative marking for incorrect answers.
Exam Centres in India
There are seven exam centres in India where you can take the FRM Exam. Here are the details regarding the same:
|Bangalore, Karnataka||Prometric Testing Pvt. Ltd
3rd Floor Tower B, Whitefield ITPL Road
|Chennai, Tamilnadu||Prometric Testing Centre c/o Dhanalakshmi College of Engineering
Dr. V. P. R. Nagar, Manimangalam Post
|Hyderabad, Telangana||Prometric Testing Pvt. Ltd
Kapil Towers IT Block, 9F Unit-2
Survey No 115/1, Opp ICICI Bldg, Nanakramguda, Gachibowli
|Kolkata, West Bengal||Techno India University
GATE NO:2, EM-4/1,, Sector V, Salt Lake
|Mumbai, Maharashtra||Thakur College of Science & Commerce
GATE No :3, Thakur Village, Kandivali East
|New Delhi, Delhi||Abinav Global School
Entry from Gate# 5, Nr Metro Stn, Sector 13, Kakrola, Dwarka
|Pune, Maharashtra||Indian Institute For Aeronautical Engineering And Information Technology
Shastri Campus, S. No 85,, NDA Road
How to Become FRM Certified?
Getting FRM certification is no simple task and is awarded on completing all the requisite levels. Apart from the FRM exam, the candidates also need to fulfill other criteria. Here is a step-by-step guide on how you can become a certified FRM:
- The first step is to clear the rigorous FRM exam part 1 and 2. Once you pass the first part, you need to clear the second level within four years.
- After clearing both the parts of the FRM exam, the candidate must demonstrate a minimum of 2 years of work experience and this has to be mentioned via an online application. The related experience may include industry research, academia, trading, portfolio management, auditing, risk technology or risk consulting.
- After getting the certification, it is strongly recommended that the FRMs keep their knowledge and skills up-to-date by enrolling in Continuing Profesional Development (CPD) program.
Note: Participation in this program is completely voluntary.
FRM Study Material
FRM Study Materials will be provided to you during your registration. Your registration fee includes the fees for the ebooks. However, you can opt for physical copies for extra charges.
You can download the Study Guide from GARP. It includes the entire syllabus in detail.
Also Read: Investment Banking Jobs
FRM Exam has certain policies that students need to follow in order to take the exam. Here are crucial exam policies that you must be aware of:
Exam Admission Policy
Students need to make sure of the following details in order to take the exam seamlessly:
- In order to take the exam, you must register and pay the examination fee.
- If the candidate does not attend the exam on the mentioned date, they will forfeit the registration fee.
- If they wish to sit in the future, they must repeat the entire registration process again
- If you wish to get refund after the registration, you must do it within 48 hours, post that no refund request will be accepted
- FRM Candidates can only request for deferring their exam date for each FRM Exam I and Exam II. There is a USD 200 fee to defer.
Exam Room Policies
On the day of exam, you need to prepare specially for your admission in the exam room to following crucial rules during the exam:
- You must bring a government-issued Passport or Drivers’ license
- You must bring a printed copy of your confirmation of appointment email.
- You should bring a Calculator with you. Only the following calculators are allowed, any other calculator will result in not calculating your results:
- Hewlett Packard 12C
- Texas Instruments BA II Plus
- Hewlett Packard 10B II
- Hewlett Packard 10BII+
- Hewlett Packard 20B
- You cannot bring anything else with you including a pencil.
- You will be provided with pencils and two scratch papers
- All personal belongings will be submitted to the storage box.
- You can use restroom facilities during the exam but your time will be counted during the exam
FRM Exam is a certification program to prove financial knowledge and professional skills and be at par with the experts employed in the leading multinational companies and institutions across the world.
FRM Exam is not easy to take as it includes quantitative knowledge. Only 25% of the students who register for the exam pass both FRM Part I and II.
FRM exam costs different for both Part I and Part II. The one time enrollment fee is USD 400 and registration fee for Part I is USD550 and for Part II is USD475.
The demand for FRM is increasing every year. In the past year, the demand of certified FRM has increased more than 60%.
Even though obtaining an FRM certification opens the door to an array of opportunities, clearing the FRM exam is not a simple path. Needless to say, it requires the right kind of skills and education in the field of Finance and Management. If you are looking forward to pursuing higher education before appearing for the exam but are not sure about how to get started with it then take the assistance of Leverage Edu’s AI-enabled tool. It will curate the list of the best programs and universities keeping in mind your interests and competencies.