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The FRM Program: Expectations, Benefits, and Tips

frm-program

Introduction

A Financial Risk Manager (FRM) that desires to be recognized by the Global Association of Risk Professionals (GARP) is required to pass an exam that grants hopefuls the right of passage into fulfilling careers within the world of finance. Passing the exam grants you with an FRM certification that sets you apart in the global marketplace. To employers, this certification signifies mastery in various risk practices and unlocks a global network of risk managers that dedicate themselves to improving financial stability and are great connections for you to have as you progress through your career.

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Open Market Operations – A Tool for Inflation and Interest Rate Targeting

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OMOs or Open Market Operations are a commonly used tool by Central Banks to administer the monetary policy. Central Banks try and control the price and quantity of money in the economy through the implementation of the monetary policy, price of money being interest rates. In the ensuing paragraphs, we will see how OMOs are affectively used by central banks to target the general level of inflation and interest rates in the economy.

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CFA Level 1 Financial Ratios Sheet

Most financial ratios are important for your CFA level 1 exam. Here is an extensive list of these ratios. You can also download AnalystPrep ratio sheet by clicking on this link.

Activity Ratios

Activity ratios measure how efficiently a company performs day-to-day tasks, such as the collection of receivables and management of inventory. The table below clarifies how to calculate most of the activity ratios.

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Analyst Prep Discount Code – 15% off with Coupon Code “BLOG15”

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If you’re looking for an Analyst Prep coupon code, you’ve come to the right place! Using the “BLOG15” after clicking on this link will provide you a 15% discount on the Premium study package. The CFA level 1 preparation platform offers mock questions and study notes that will make your study time much more efficient.

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CFA Historical Pass Rates

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The CFA Institute has kept track of pass rates dating back to 1963 when there was just a single test for the 284 candidates to take. Only 16 of them failed. You can actually take the very first CFA exam on the CFA Institute’s website to get a sense for how you might have fared. In 2016, 107,591 tests were failed. In addition to the massive growth in popularity of the CFA exam, pass rates have clearly declined significantly since the three-test system was implemented in 1964. Since 2008 or so, pass rates for all three tests appear to have stabilized somewhat and even started to wander upwards. Another clear trend from the figure above is the higher pass rates for higher levels. Level III candidates outperform Level II candidates who, in turn, outperform Level I candidates.

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The Complete CFA Salary Analysis

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In the following article, I’m going to dig into data available on Payscale.com to analyze the affect a CFA has on the median analyst’s salary. While I don’t use any data based on fewer than 100 respondents, a limited sample size in some instances may be significantly affecting the figures shown. Furthermore, it is not possible to separate out salaries for those without CFAs so all comparisons are those with CFAs vs. the overall median for that category. Another shortcoming is that this post focuses purely on salary compensation of employees, excluding other forms of compensation including commission, bonus, and perks. Salary compensation alone may not always show the full picture, but on average – I would expect the CFA-related compensation increases in these areas to fall in line with increases in salary. Finally, the data in the article is based only on salaries in the United States as this provided an ample and accessible set of data. This isn’t a scientific study, but merely an attempt to find some interesting stories within the data. Without further delay, let’s get to it.

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Financial Models

A “financial model” can be a lot of things. The phrase is usually used to describe a representation of a real financial situation. Financial models typically use a set of assumptions and inputs to generate an output or set of outputs that informs the user. Models can range from simple math calculations in Microsoft Excel to complex programs built using C++, Python, MATLAB, or other applications. Despite the limited capabilities and speed of Excel, it is a very common tool used in financial modeling due to its flexibility and accessibility. In this post, I will give a brief introduction to just a few types of models used in the finance industry.  Since firms and analysts have specific preferences and data sets, there is no simple instruction manual to building any type of financial model. Additionally, this is by no means an exhaustive list of all the various types of financial models being used in the world today but is simply meant to give readers a glimpse into how financial data can be used to help inform decision makers.

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1 Month Study Plan – CFA Level 1

There is only one month to go before the CFA Level 1 exam, and you should already be performing quizzes and mock questions. If it’s not the case, then it’s definitely time to take a deep breath and buckle down to the daunting task ahead.

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How I Passed the CFA Level 1 Exam on the First Attempt

If you are reading this post, there is a high chance that you are a level 1 candidate just like I was a few years back. You are also probably a fast learner and an ambitious young professional like most of the candidates. The thing is, as you might already know, only about 45% of your study colleagues will succeed on the battlefield that is the CFA level 1 exam day. And yes, you want to be part of it. Here are a few useful tips on how I managed to succeed while having a full-time occupation.

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Memory Cards and Tricks for Complex Concepts

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Flash cards are expedient; you can prepare your own or even use the digital ones provided through online channels. We prepared some flash cards to help you with some confusing CFA Level 1 concepts:

Ethics

Material nonpublic Information and the Mosaic Theory are crucial concepts in the CFA Level 1 exam.

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