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FRMSyllabuswithTopicWiseWeightageandSubTopics

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FRM Part 1 syllabus

August 29, 2014 #FRM Syllabus (http://www.edupristine.com/blog/tag/frm-syllabus), FRM
(http://www.edupristine.com/blog/tag/frm), FRM Exam (http://www.edupristine.com/blog/tag/frm-exam), FRM Part 1
(http://www.edupristine.com/blog/tag/frm-part-1), FRM Part 1 syllabus (http://www.edupristine.com/blog/tag/frm-part-1syllabus), frm part 2 (http://www.edupristine.com/blog/tag/frm-part-2), FRM Part 2 syllabus
(http://www.edupristine.com/blog/tag/frm-part-2-syllabus)

Shut your doors, drop the drapes on your windows and dont bother looking at the clock
because its always the same time, FRM preparation time
The FRM syllabus is broken down into syllabus for FRM Part 1 and syllabus for FRM Part
2.

FRM Syllabus breakdown:

Download: FRM Part 1 Free Study Material (http://www.edupristine.com/ca/frm-part1-virtual-classroom/intensive/)

Download: FRM Part 2 Free Study Material (http://www.edupristine.com/ca/frm-part2-virtual-classroom/intensive/)

FRM Part 1 Syllabus:

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FRM Syllabus covers the fundamental tools and techniques used in risk management
and the theories that underlie their use. Specific areas of coverage and their weighting in
the Syllabus for FRM Part 1 are:

1. Foundations of Risk Management (20%)

This area focuses on a candidates knowledge of foundational concepts of risk
management and how risk management can add value to an organization and
includes:
An understanding of corporate risk governance and the trade-off between risk
and return
The construction of efficient portfolios
Fundamental asset pricing models
Enterprise risk management frameworks
Data quality management
A review of major financial disasters
To emphasize the importance of ethics as a fundamental requirement for sound
risk management, applications of the GARP Code of Conduct to professional
situations are covered in this section as well

2. Quantitative Analysis (20%)

This area tests a candidates knowledge of basic probability and statistics, regression and
time series analysis, and various quantitative techniques useful in risk management such
as:
Monte Carlo methods
Volatility forecasting models
Value-at-Risk estimation

3. Financial Markets and Products (30%)

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This area tests the candidates knowledge offinancial products and the markets in which
they trade, including:
Futures and forwards
Equity options, swaps, and other derivatives
Commodities
Currencies
Corporate bonds and interest rates
A basic understanding of arbitrage arguments and hedging related to these
financial products

4. Valuation and Risk Models (30%)

This area of FRM Pa will test a candidates knowledge of valuation techniques and risk
models. This includes:
Basic bond valuation and bond hedging
Valuation using binomial trees
An understanding of the Black-Scholes-Merton model
Value-at-Risk (VaR)
Expected and unexpected loss estimation
Stress testing

FRM Part 2 Syllabus

Part II of the FRM Exam further applies the tools and techniques covered in Part I and
delves more deeply into major sub-areas of risk management. Specific areas of coverage
include:

1. Market Risk Management (25%)

This section tests a candidates knowledge of market risk measurement and
management techniques. These include:

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Fixed-income interest rate sensitivities

Volatility exposures
Value-at-Risk (VaR) and backtestingVaR
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Expected shortfall (ES)

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Correlations and copulas

Parametric and non-parametric estimationmethods
Extreme value theory (EVT)
Exotic options and mortgage-backed securities

2. Credit Risk Management (25%)

This area focuses on a candidates understandingof credit risk management with some
focus given to structured finance and credit products such as collateralized debt
obligations and credit derivatives. Knowledge of counterparty risk is also tested, as well
as default risk and methodologies used to measure it, such as Credit VaR.

3. Operational and Integrated Risk Management (25%)

This section of FRM Part 2 November syllabus addresses a candidates knowledge of two
areas of increasing importance for many firmsoperational risk management and
integrated risk management. This includes:
Coverage of the tools and techniques necessary to measure, manage, and
mitigate operational risk
Economic capital allocation
Enterprise risk management (ERM)
Knowledge of critical issues related to liquidity risk management, model risk, loss
data modelling and IT infrastructure, stress testing, and risk appetite
Importantly, this section also tests a candidates knowledge of key regulations
and the major international regulatory frameworks relevant to risk managers

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today, such as Basel

4.Risk Management and Investment Risk Management (15%)

This area focuses on a candidates knowledgeof risk management techniques applied to
theinvestment management process. Topics such asportfolio construction and
performance analysisare covered, as well as risk budgeting and portfolioand component
VaR. Issues related to hedge fundsand private equity investments are also covered.

5. Current Issues in Financial Markets (10%)

The candidate is expected to familiarize him/herself with the readings from this
section,approaching each paper critically as a riskmanager equipped with the knowledge
fromthe other sections. This area of the Exam will testa candidates knowledge of the
material coveredby each paper. Recent topics have included:
Sovereign Risk and Financial Crisis
Flash Crash
Financial Innovation and Its Issues
Thats the syllabus for FRM, All the best with you preparation!

Related links you will like:

FRM Exam Prep with EduPristine (http://www.edupristine.com/blog/frm-1-and-frm-2exam-preparation/)
Guide on how to prepare for FRM Exam (http://www.edupristine.com/blog/frmguide/)
Frequently Asked Questions: FRM (http://www.edupristine.com/blog/frm-faq/)

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