FRM Part I & II Curriculum

FRM Part I

Thinking about taking on the FRM syllabus? The Financial Risk Manager (FRM) course syllabus is designed for those who want to lead in financial risk management. It’s structured to ensure you gain a deep understanding of everything from risk modeling to market analysis. To help you in this complex journey, AnalystPrep has assembled this guide to give you a straightforward look at the FRM Level 1 syllabus.

Whether you’re in the early stages or further along with FRM Part 1, this breakdown will guide you through each core subject and provide strategies for making the most of your study time. Come along and we’ll get you fully prepared for success!

Table of Contents

1. Introduction to the FRM Exam
2. Why Pursue FRM Certification?
3. FRM Part 1 Exam Overview
4. Detailed FRM Part 1 Syllabus
5. AnalystPrep’s FRM Study Materials
6. Exam Preparation Tips
7. Career Impact of FRM Certification
8. Frequently Asked Questions (FAQs)
9. Additional Resources

Introduction to the FRM Exam

The FRM exam is a globally respected certification, run by the Global Association of Risk Professionals (GARP), and consists of two parts. Passing FRM Level 1 is the first step and a prerequisite for Level 2. This certification is highly regarded by employers because it demonstrates your expertise in risk analysis, financial markets, and critical quantitative skills. AnalystPrep’s tailored resources and materials align with the FRM course syllabus to help you get certified as efficiently as possible.

Why Pursue FRM Certification?

Why aim for FRM certification? With a unique focus on the FRM syllabus 2025, this credential is your key to advancing in fields like investment management, risk analysis, and banking. Plus, FRM-certified professionals frequently command higher salaries and have access to more specialized job roles due to the advanced skills they develop through the FRM curriculum.

FRM Part 1 Exam Overview

The FRM Part 1 exam evaluates foundational skills essential for financial risk management. The syllabus covers four main subjects, each weighted to emphasize real-world applications. Here’s a quick look at the breakdown:

• Foundations of Risk Management – 20%
• Quantitative Analysis – 20%
• Financial Markets and Products – 30%
• Valuation and Risk Models – 30%

Since understanding these core areas is vital to passing both Part 1 and Part 2 of the exam, AnalystPrep provides in-depth study resources, including practice questions, mock exams, and key concept summaries that align with the FRM exam syllabus.

Detailed FRM Part 1 Syllabus

Module 1: Foundations of Risk Management

The first section of the FRM Level 1 syllabus covers the essential principles of risk management. You’ll delve into risk governance, learn about risk cultures, and analyze case studies that bring past financial crises to life. Mastering these concepts is critical, as they form the base for more advanced topics in FRM Level 2.

1. The Building Blocks of Risk Management
2. How Do Firms Manage Financial Risk?
3. The Governance of Risk Management
4. Credit Risk Transfer Mechanisms
5. Modern Portfolio Theory (MPT) and the Capital Asset Pricing Model (CAPM)
6. The Arbitrage Pricing Theory and Multifactor Models of Risk and Return
7. Risk Data Aggregation and Reporting Principles
8. Enterprise Risk Management and Future Trends (Available for AnalystPrep Premium Users; Click Here)
9. Learning From Financial Disasters (Available for AnalystPrep Premium Users; Click Here)
10. Anatomy of the Great Financial Crisis of 2007-2009 (Available for AnalystPrep Premium Users; Click Here)
11. GARP Code of Conduct (Available for AnalystPrep Premium Users; Click Here)

 Module 2: Quantitative Analysis

In Quantitative Analysis, you’ll develop a strong command of probability theory, statistical analysis, and econometrics. These skills will support you through both Part 1 and Part 2 of the FRM syllabus, enabling you to handle complex calculations and data interpretation confidently. AnalystPrep’s video lessons and practice exams provide clear, approachable explanations to make this technical content more accessible.

1. Fundamentals of Probability
2. Random Variables
3. Common Univariate Random Variables
4. Multivariate Random Variables
5. Sample Moments
6. Hypothesis Testing
7. Linear Regression
8. Regression with Multiple Explanatory Variables
9. Regression Diagnostics
10. Stationary Time Series (Available for AnalystPrep Premium Users; Click Here)
11. Nonstationary Time Series (Available for AnalystPrep Premium Users; Click Here)
12. Measuring Return, Volatility, and Correlation (Available for AnalystPrep Premium Users; Click Here)
13. Simulation and Bootstrapping (Available for AnalystPrep Premium Users; Click Here)

Module 3: Financial Markets and Products

This part of the FRM course syllabus covers financial markets, derivatives, and fixed income products—knowledge crucial for risk assessment and management. AnalystPrep’s notes on this section simplify the complex relationships between these products and give you the tools to understand their associated risks. Key topics include:

1. Banks
2. Insurance Companies and Pension Plans
3. Fund Management
4. Introduction to Derivatives
5. Exchanges and OTC Markets
6. Central Clearing
7. Futures Markets
8. Using Futures for Hedging
9. Foreign Exchange Markets
10. Pricing Financial Forwards and Futures
11. Commodity Forwards and Futures
12. Options Markets
13. Properties of Options
14. Trading Strategies
15. Exotic Options
16. Properties of Interest Rates
17. Corporate Bonds (Available for AnalystPrep Premium Users)
18. Mortgages and Mortgage-backed Securities (Available for AnalystPrep Premium Users)
19. Interest Rate Futures (Available for AnalystPrep Premium Users)
20. SWAPS (Available for AnalystPrep Premium Users)

 Module 4: Valuation and Risk Models

The final section of the FRM Part 1 syllabus dives into the essential tools used to measure and model risk, such as Value at Risk (VaR) and Credit VaR. With AnalystPrep’s mock exams, you’ll get a feel for how these valuation models appear on test day, ensuring you’re ready for any question in the FRM exam pattern.

1. Measures of Financial Risk
2. Calculating and Applying VaR
3. Measuring and Monitoring Volatility
4. External and Internal Ratings
5. Country Risk
6. Measuring Credit Risk
7. Operational Risk
8. Stress-Testing
9. Pricing Conventions, Discounting, and Arbitrage
10. Interest Rates
11. Bond Yields and Return Calculations
12. Applying Duration, Convexity, and DV01
13. Modeling and Hedging Non-Parallel Term Structure Shifts (Available for AnalystPrep Premium Users; Click Here)
14. Binomial Trees (Available for AnalystPrep Premium Users; Click Here)
15. The Black-Scholes-Merton Model (Available for AnalystPrep Premium Users; Click Here)
16. Option Sensitivity Measures: The “Greeks” (Available for AnalystPrep Premium Users; Click Here)

AnalystPrep’s FRM Study Materials

AnalystPrep offers a comprehensive range of materials aligned with the FRM syllabus 2025. Here’s how our resources can support your exam preparation:

• Study Notes: In-depth summaries that cover all major FRM subjects.
• Video Lessons: Engaging videos that simplify challenging topics.
• Mock Exams: Realistic practice tests aligned with the FRM exam pattern.

Exam Preparation Tips

Gearing up for the FRM Part 1 exam requires discipline and an effective strategy. Here are a few tips:

• Prioritize Heavier Sections: Allocate more time to high-weight areas like Financial Markets and Valuation Models.
• Stay Consistent: Regular review and practice are key. Using AnalystPrep’s timed mock exams helps you adapt to the real test format and ensures your preparation aligns with the FRM curriculum.
• Track the Exam Dates: Knowing the official FRM exam dates helps in planning and pacing your study sessions.

Career Impact of FRM Certification

The FRM certification boosts your profile across various sectors, including banking, asset management, and regulatory roles. Holding the FRM title signals to employers your specialized knowledge in risk assessment, enhancing your job prospects and likely boosting your salary potential.

Frequently Asked Questions (FAQs)

What is the structure of the FRM exam?
The FRM exam has two parts, each covering different areas of risk management. FRM Part 1 focuses on the fundamentals, including Quantitative Analysis, Financial Markets, and Risk Models, while FRM Part 2 delves deeper into areas like Market Risk Measurement, Operational and Integrated Risk Management, and Liquidity Risk. Both parts are multiple-choice, held twice a year, and structured to assess practical, real-world risk management knowledge.

What is the passing rate for FRM Part 1?
Historically, the passing rate for FRM Part 1 ranges between 40% and 50%. It’s worth noting that GARP (Global Association of Risk Professionals) designs the exam to test deep knowledge and analytical skills, so consistent, dedicated preparation is key to passing.

How much time should I dedicate to studying for the FRM Part 1 exam?
It’s recommended to dedicate about 200–240 hours to prepare effectively for FRM Part 1. This time allows for a comprehensive review of each section in the syllabus, practice with a question bank, and mock exams to solidify your understanding and improve speed.

What resources do I need for FRM preparation?
Key resources include the FRM study material PDF, official FRM Part 1 books, practice question banks, and mock exams. Many candidates also rely on supplementary resources, like AnalystPrep’s video lessons, practice questions, and mock exams, to enhance their preparation and confidence.

How does FRM compare to CFA in terms of career impact?
While both the FRM and CFA certifications are highly regarded in finance, they serve different niches. The FRM qualification is ideal for those focused on risk management, whereas the CFA caters to investment management professionals. Both certifications can improve your career, but FRM provides specialized knowledge directly applicable to roles in financial risk management.

What career opportunities are available post-FRM certification?
After obtaining the FRM certification, candidates often qualify for specialized roles, including Risk Manager, Financial Risk Analyst, Market Risk Specialist, and Credit Risk Manager. Employers in sectors like banking, insurance, asset management, and consulting actively seek FRM-certified professionals.

Are AnalystPrep’s study notes sufficient to pass the exam?
AnalystPrep’s study notes are designed to cover the essential topics outlined in the FRM syllabus comprehensively. When combined with mock exams and practice questions, AnalystPrep provides a solid foundation for mastering the FRM exam.

How often does the FRM curriculum change?
GARP periodically updates the FRM curriculum to keep pace with the evolving financial landscape. Candidates should review the latest curriculum and update their study materials each year to ensure they cover all new additions or adjustments.

What are the benefits of using AnalystPrep’s mock exams?
Mock exams are essential for gauging readiness. AnalystPrep’s mock exams are structured to mimic the actual exam format, providing candidates with realistic practice under timed conditions. This practice helps improve speed, accuracy, and familiarity with the FRM exam pattern.

How do I prepare for the FRM exam?
Start by understanding the FRM course syllabus and organizing a study schedule. Utilize a mix of FRM study material PDFs, question banks, and mock exams. AnalystPrep’s study resources and mock exams offer a structured pathway to review all FRM subjects comprehensively.

What is the full form of FRM?
FRM stands for Financial Risk Manager, a certification provided by the Global Association of Risk Professionals (GARP) for professionals specializing in risk management.

What is the FRM exam?
The FRM exam certifies professionals in risk management, covering topics essential for analyzing and managing risk in financial sectors.

What are the GARP and FRM full forms?
GARP stands for the Global Association of Risk Professionals, which administers the FRM (Financial Risk Manager) certification.

What are the FRM calculator requirements?
Candidates can only use specific calculators on the FRM exam. GARP allows models like the Texas Instruments BA II Plus or Hewlett-Packard 10BII+.

Certification and Course Details

Understanding the details of the FRM course and certification process helps you prepare with confidence.

• FRM course details: The Financial Risk Manager course covers Part 1 and Part 2 exams with a focus on risk management in financial markets.
• FRM certification cost: Costs vary, including registration and exam fees, with discounts for early registration.
• FRM fees structure: Fees typically include enrollment, exam fees, and optional costs for study materials.
• FRM eligibility criteria: While there are no specific educational prerequisites, a background in finance, statistics, or mathematics can be beneficial.

 Career and Value of FRM Certification

The FRM certification has proven value in the job market, offering roles in financial risk management. Here’s how it impacts careers:

• Financial risk management syllabus: By mastering the FRM syllabus, candidates build specialized skills that set them apart in the job market.
• Salary after FRM Level 1: Although full certification may have a larger impact, many employers value candidates who have passed Level 1.
• Is FRM worth it?: Absolutely. FRM certification enhances job prospects, earning potential, and access to specialized roles in risk management.
• FRM qualification and career impact: The FRM is ideal for anyone looking to specialize in risk, especially in fields like banking, asset management, and consulting.
• FRM pass rate: The certification’s value is reinforced by its challenging exams, ensuring that those who pass are truly proficient in risk management.

By taking a structured approach to the FRM syllabus and making use of resources like AnalystPrep’s mock exams and study materials, you can approach the exam with confidence and set yourself up for a successful career in risk management.

Study Material and Resources

Choosing the right resources is essential for success. Here’s a look at what you need for effective FRM preparation:

• FRM study material PDF: Downloadable resources offer a quick overview and convenient access to FRM content.
• FRM Part 1 and Level 1 books: Cover the foundational aspects of the exam, including risk management principles and quantitative analysis.
• GARP FRM resources: Official resources from GARP provide a solid foundation, covering all exam topics.
• FRM question bank: Access to a diverse question bank provides insight into the types of questions on the actual exam and reinforces key concepts.

Additional Resources
FRM Part II
Market Risk Measurement and Management

1. Estimating Market Risk Measures
2. Non-Parametric Approaches
3. Parametric Approaches (II): Extreme Value
4. Backtesting VaR
5. VaR Mapping
6. Messages from the Academic Literature on Risk Management for the Trading Book
7. Some Correlation Basics: Properties, Motivation, Terminology
8. Empirical Properties of Correlation: How Do Correlations Behave in the Real World?
9. Financial Correlation Modeling – Bottom-Up Approaches
10. Empirical Approaches to Risk Metrics and Hedging
11. The Science of Term Structure Models
12. The Evolution of Short Rates and the Shape of the Term Structure
13. The Art of Term Structure Models: Drift
14. The Art of Term Structure Models: Volatility and Distribution
15. Volatility Smiles
16. Fundamental Review of the Trading Book

Credit Risk Measurement and Management

1. The Credit Decision
2. The Credit Analyst
3. Capital Structure in Banks
4. Rating Assignment Methodologies
5. Credit Risks and Credit Derivatives
6. Spread Risk and Default Intensity Models
7. Portfolio Credit Risk
8. Structured Credit Risk
9. Counterparty Risk and Beyond
10. Netting, Close-out and Related Aspects
11. Margin (Collateral) and Settlement
12. Future Value and Exposure
13. Counterparty Risk Intermediation
14. CVA (Part A)
15. CVA (Part B – Wrong-way Risk)
16. The Evolution of Stress Testing Counterparty Exposures
17. Credit Scoring and Retail Credit Risk Management
18. The Credit Transfer Markets – And Their Implications

Liquidity and Treasury Risk Measurement and Management

1. Liquidity Risk
2. Liquidity and Leverage
3. Early Warning Indicators
4. The Investment Function in Financial Services Management
5. Liquidity and Reserves Management: Strategies and Policies
6. Intraday Liquidity Risk Management
7. Monitoring Liquidity
8. The Failure Mechanics of Dealer Banks
9. Liquidity Stress Testing
10. Liquidity Risk Reporting and Stress Testing
11. Contingency Funding Planning
12. Managing and Pricing Deposit Services
13. Managing Nondeposit Liabilities
14. Repurchase Agreements and Financing
15. Liquidity Transfer Pricing: A Guide to Better Practice
16. The US Dollar Shortage in Global Banking and the International Policy Response (Available for AnalystPrep Premium Users; Click Here)
17. Covered Interest Rate Parity Lost: Understanding the Cross-Currency Basis (Available for AnalystPrep Premium Users; Click Here)
18. Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques (Available for AnalystPrep Premium Users; Click Here)
19. Illiquid Assets (Available for AnalystPrep Premium Users; Click Here)

Risk Management and Investment Management

1. Factor Theory
2. Factors
3. Alpha (and the Low-Risk Anomaly)
4. Portfolio Construction
5. Portfolio Risk: Analytical Methods
6. VaR and Risk Budgeting in Investment Management
7. Risk Monitoring and Performance Measurement (Available for AnalystPrep Premium Users; Click Here)
8. Portfolio Performance Evaluation (Available for AnalystPrep Premium Users; Click Here)
9. Hedge Funds (Available for AnalystPrep Premium Users; Click Here)
10. Performing Due Diligence on Specific Managers and Funds (Available for AnalystPrep Premium Users; Click Here)
11. Finding Bernie Madoff: Detecting Fraud by Investment Managers

Current Issues in Financial Markets

1. Beyond LIBOR: A Primer on the New Benchmark Rates
2. Machine Learning: A Revolution in Risk Management and Compliance?
3. Artificial Intelligence and Machine Learning in Financial Services
4. Climate Change: Physical Risk and Equity
5. The Green Swan – Central Banking and Financial Stability in the Age of Climate Change
6. When Selling Becomes Viral: Disruptions in Debt Markets in the COVID-19 Crisis and the Fed’s Response 
7. Financial Crime in Times of COVID-19 – AML and Cyber Resilience Measures 
8. Global Financial Stability Report: Markets in the Time of COVID-19
9. Replacing LIBOR
10. Cyber Risk and the U.S. Financial System: A Pre-Mortem Analysis