Every December, the GARP Association will announce the changes in the test center for the next year's FRM exam, and the GARP Association has announced the latest syllabus for 2023, so let's give you an interpretation of the FRM exam in 2024!
Get it for free! The latest FRM exam syllabus Preparation materials Online course** to help you prepare for the exam easily!
1. FRM level 1
There are four subjects in the FRM Level 1 exam, with a total of 100 multiple-choice questions, although it sounds simple, but it actually contains a lot of knowledge points:
1. Fundamentals of risk management.
There are not many changes to the content of the 2023 exam. Focus on FRM concepts, effective frontiers, CML, SML, CAPM, Performance*uation, and more. Exams account for 20%.
2. Quantitative analysis.
Three new LOS articles have been added to quantitative analysis (the original text has not changed) and two new chapters on machine learning have been added. Focus on: probability, various distributions, central limit theorem, univariate regression, multiple regression, time series, and more. Exams account for 20%.
3. Financial markets and products.
Not much has changed. The top priority of the Level 1 exam, the exam accounts for 30%. It is mainly to understand the definition of underlying financial assets and derivatives, as well as to understand their settlement and measurement methods
1) Underlying financial assets: corporate bonds, etc. (as well as understanding the time value);
2) Derivatives: forwards, options, etc., including more complex derivatives such as MBS;
3) The pricing valuation of derivatives (binary tree model, BSM model, etc.) generated according to the trading mode of derivatives, etc.;
4) Hedging and other strategic content.
4. Valuation and risk modeling.
The most important core of this part: VAR. It contains more bond content, as well as bond derivatives, such as bond valuation, MBS, etc. Exams account for 30%.
There are two syllabus adjustments for the course of financial markets and products, but they are fine-tuned, and they are some textual adjustments and errata adjustments, and the changes are not very large.
Judging from the last few exams, Level 1 generally focuses more on qualitative questions that examine the understanding of concepts, and a year or two ago, a large number of complex calculation questions are becoming less and less. To improve the accuracy of qualitative questions, we first need to better understand the knowledge points, and then brush the questions.
2. FRM Level 2
The content of the FRM Level 2 exam in 2023 has changed:
1. Market risk measurement and management.
Market risk measurement and management deletes 1 LOS and modifies 3 LOS. Exams account for 20%.
2. Credit risk measurement and management.
6 LOS have been added to credit risk measurement and management, and 1 LOS has been deleted. Exams account for 20%.
3. Operational risk and resilience.
Operational risk and resilience have changed significantly, except for the chapters related to Capital (C18-C20) and (C8 12 15 17), the rest of the content is new, and the reference book of one chapter in Basel Accords has changed, and a new chapter has been added. Exams account for 20%.
4. Risk management and investment management.
Risk Management and Investment Management revise an LOS with a focus on portfolio construction and risk measurement, performance analysis and hedging**. Exams account for 15%.
5. Measurement and management of liquidity and capital risk.
It is recommended to focus on "Measurement of Liquidity Risk", "Asset and Liability Management", "Liquidity Transfer Pricing", "Contingency Planning" and "Liquidity Risk Management". Exams account for 15%.
6. The current hot spots in the financial market.
In the current period, the hot issues in the financial market have changed greatly, and only 3 articles have been retained and 5 articles have been replaced. 5 older articles have been deleted, and new research articles on inflation risk, climate risk management, blockchain, bitcoin, etc. have been added.
FRM Level 1 subjects and specific contents.
Financial Risk Manager Career Prospects.
What is FRM?