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GARP Official • Updated 2026

FRM Part 2 Syllabus 2026 — Topics, Weights & Chapters

The complete GARP FRM Part 2 2026 curriculum — all 6 topics, official weights, full chapter breakdown, 2026 changes, study hours & an expert prep plan from Deepak Goyal, CFA & FRM Charterholder at RBei Classes.

Quick Answer

The FRM Part 2 2026 syllabus has 6 topics tested over 80 MCQs in 4 hours: Market Risk (20%), Credit Risk (20%), Operational Risk & Resilience (20%), Liquidity & Treasury Risk (15%), Risk & Investment Management (15%), and Current Issues in Financial Markets (10%). The first three topics carry 60% of the exam.

Based on GARP official curriculum
94% Part 2 pass rate (Aug 2025)
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FRM Part 2 Overview

What Is the FRM Part 2 Syllabus 2026?

RBei Classes, an FRM & CFA coaching institute in Noida, explains it simply: FRM Part 2 is the second and final exam of the GARP Financial Risk Manager programme. Where Part 1 builds the foundational toolkit, Part 2 is about applied risk management — how banks, asset managers and insurers actually measure, manage and report risk.

The 2026 syllabus is organised into six topic areas tested across 80 multiple-choice questions in 4 hours. The three highest-weighted topics — Market Risk, Credit Risk and Operational Risk & Resilience — together carry 60% of the exam, so most study time should go there.

For 2026, GARP made significant updates to two sections: Risk & Investment Management (new alternatives, private-markets and hedge-fund content) and Current Issues in Financial Markets (AI in risk, scenario generation, digital assets). Use 2026 materials for these — older books leave gaps.

Key Takeaways

  • 6 topics, 80 MCQs, 4 hours, computer-based, no negative marking.
  • Weights: Market 20%, Credit 20%, Operational 20%, Liquidity 15%, Investment 15%, Current Issues 10%.
  • You must pass FRM Part 1 before your Part 2 result counts.
  • Biggest 2026 changes are in Investment Risk and Current Issues.
  • RBei Classes recorded a 94% Part 2 pass rate in the Aug 2025 window.
FRM Part 2 Syllabus 2026

FRM Part 2 Topics & Weight Breakdown

Official GARP FRM Part 2 syllabus — 6 topics, 80 MCQs, 4 hours. The same topic weights apply for the May, August & November 2026 windows.

FRM Part 2 — 2026 Exam Overview

Focus: applied risk management — market, credit, operational, liquidity, investment & current issues

80
MCQs
4
Hours
6
Topics
~240
Study Hrs
FRM Part 2 Topic (2026)WeightApprox. Questions
Market Risk Measurement & Management20%~16
Credit Risk Measurement & Management20%~16
Operational Risk & Resilience20%~16
Liquidity & Treasury Risk Measurement & Mgmt15%~12
Risk Management & Investment Management15%~12
Current Issues in Financial Markets10%~8
Total100%80 MCQs

Topic Weight Distribution — FRM Part 2 2026

Market Risk Measurement & Mgmt
20%
Credit Risk Measurement & Mgmt
20%
Operational Risk & Resilience
20%
Liquidity & Treasury Risk
15%
Risk & Investment Management
15%
Current Issues in Financial Markets
10%

This section extends the Part 1 VaR toolkit to professional-level market-risk measurement: advanced VaR methodologies, backtesting and VaR mapping, expected shortfall and stressed metrics, term-structure and short-rate models, volatility smiles, exotic options, and the Basel III/IV market-risk capital framework including the Fundamental Review of the Trading Book (FRTB).

  • Estimating Market Risk Measures: Introduction
  • Non-Parametric Approaches to Market Risk
  • Parametric Approaches to Market Risk
  • Backtesting VaR
  • VaR Mapping
  • Expected Shortfall & Stressed Metrics
  • The Science of Term Structure Models
  • The Evolution of Short Rate Models
  • Volatility Smiles & Term Structure
  • Exotic Options & Structured Products
  • Fundamental Review of the Trading Book (FRTB)
  • Stress Testing Banks & Sound Practices
Deepak Sir's Insight: Backtesting, VaR mapping and FRTB are perennial high-yield areas. Be fluent in the difference between parametric, non-parametric and stressed VaR — examiners test the boundaries between methods.

Credit Risk is the most mathematically demanding section of Part 2. It covers default-probability and spread models, portfolio credit risk, structured credit (CDOs and CLOs), counterparty credit risk, credit value adjustment (CVA/DVA), credit derivatives and the regulatory capital framework — the full credit lifecycle from PD/LGD/EAD through to economic capital.

  • Credit Risk & Credit Analysis Fundamentals
  • Country Risk: Determinants & Measurement
  • Spread Risk & Default Intensity Models
  • Portfolio Credit Risk
  • Structured Credit Risk: CDOs & CLOs
  • Counterparty Credit Risk (CCR) Overview
  • Netting, Close-out, Rehypothecation & Margin
  • Credit Value Adjustment (CVA) & DVA
  • Credit Derivatives: CDS & Total Return Swaps
  • Credit Scoring & Retail Credit Risk
  • Expected Loss, Unexpected Loss & Economic Capital
  • Regulatory Capital for Credit Risk (Basel III/IV)
Deepak Sir's Insight: CVA, DVA and counterparty credit risk are the most frequently tested advanced topics. Practise the calculations until they are second nature — conceptual reading alone is not enough here.

Operational Risk covers non-financial risks from processes, people, systems and external events. It focuses on identification, measurement and management under Basel frameworks — governance and risk culture, loss-data collection and severity modelling, scenario analysis, the Standardised Measurement Approach (SMA), model risk and validation, cyber risk, and operational resilience including third-party and business-continuity risk.

  • Operational Risk: Principles & Concepts
  • Basel Operational Risk Framework & Capital
  • The Standardised Measurement Approach (SMA)
  • Operational Risk Governance & Culture
  • Risk & Control Self-Assessment (RCSA)
  • Key Risk Indicators (KRIs) & Metrics
  • Loss Data Collection & Severity Modelling
  • Scenario Analysis for Operational Risk
  • Model Risk & Model Validation
  • Cyber & Information Security Risk
  • Conduct Risk & Culture
  • Operational Resilience, BCP & Third-Party Risk
Deepak Sir's Insight: Conceptual but breadth-heavy. Operational resilience, third-party risk and model validation have grown in prominence — don't treat it as an easy scoring area.

This section covers funding and market liquidity risk and treasury management in banks. Core exam areas are the Liquidity Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR), asset-liability management (ALM), interest-rate risk in the banking book (IRRBB), contingency funding planning, intraday liquidity, fund transfer pricing and liquidity stress testing under Basel III.

  • Liquidity Risk: Definitions & Fundamentals
  • Funding & Liquidity Risk in Banks
  • Liquidity Coverage Ratio (LCR) — Basel III
  • Net Stable Funding Ratio (NSFR) — Basel III
  • Contingency Funding Planning (CFP)
  • Intraday Liquidity Risk
  • Market Liquidity & Liquidity-Adjusted VaR
  • Asset-Liability Management (ALM)
  • Interest Rate Risk in the Banking Book (IRRBB)
  • Funds Transfer Pricing
  • Liquidity Stress Testing
Deepak Sir's Insight: LCR and NSFR mechanics are almost guaranteed. Memorise the components and qualifying-asset haircuts — quick, reliable marks once drilled.

This section applies risk frameworks to investment portfolios — factor models, portfolio construction, risk budgeting, performance attribution and hedge-fund risk. For 2026 GARP substantially expanded it with new content on hedge-fund strategies, model validation, alternative investments and private-markets risk, including identifying distress symptoms and red flags. Use 2026 materials only.

  • Factor Theory & Factor Models
  • Portfolio Construction
  • Portfolio Risk: Analytical Methods
  • VaR & Risk Budgeting in Investment Mgmt
  • Risk Monitoring & Performance Measurement
  • Performance Evaluation (Sharpe, Treynor, Jensen)
  • Hedge Funds: Overview & Risk (Updated 2026)
  • Hedge Fund Strategies & Risk (Updated 2026)
  • Model Validation Frameworks (Updated 2026)
  • Alternative Investments & Private Markets (New 2026)
  • Risk Mgmt for Pension Funds & Insurers
2026 Update: Several new readings on private markets, hedge-fund risk and model validation, with a few older chapters removed. Expect more nuanced application questions than in 2025 — older notes will miss these additions.

Current Issues changes most each year as GARP reflects emerging risks. For 2026 the updates are heavy: artificial intelligence and machine learning in risk management, advanced scenario generation and stress testing, digital assets and crypto risk, systemic risk and interconnectedness, climate/ESG in financial institutions, cyber systemic risk and Basel IV developments. 2024-or-earlier notes will have major gaps.

  • AI & Machine Learning in Risk Management (New 2026)
  • Scenario Generation & Advanced Stress Testing (New 2026)
  • Systemic Risk & Interconnectedness
  • Climate Risk & ESG in Financial Institutions
  • Digital Assets, Crypto & Blockchain Risk
  • Cyber Risk: Systemic Implications
  • Regulatory Developments: Basel IV & Beyond
  • Geopolitical & Country Risk Dynamics
Important for 2026: Do not use 2024 or older readings here. AI in finance and scenario generation are essentially new — rely on GARP's official 2026 readings or updated coaching notes.
Prepare FRM Part 2 with Deepak Sir →
2026 Updates

FRM Part 2 2026 Changes — What Is New vs 2025

Part 2 is where GARP made the biggest 2026 changes — roughly 12 new chapters added and 9 removed, concentrated in Investment Risk and Current Issues.

✓ Stable

Market Risk Measurement & Management

Largely unchanged for 2026. VaR methodologies, backtesting, FRTB and the Basel market-risk framework remain consistent with 2025. Existing notes for this section are reliable.

✓ Stable

Credit Risk Measurement & Management

Stable year-over-year. Core credit models (PD/LGD/EAD, CVA/DVA), structured credit (CDOs, CLOs) and counterparty credit risk continue without significant change.

✓ Stable

Operational Risk & Resilience

Broadly unchanged. Basel operational-risk frameworks, the SMA, governance and resilience content carry over from 2025 with only minor refinements.

✓ Stable

Liquidity & Treasury Risk

Stable for 2026. LCR, NSFR, ALM and IRRBB frameworks remain the same — a dependable, well-defined section to lock in early.

⚠ Major Update

Risk & Investment Management

The most transformed numeric section: new readings on private-market investing, hedge-fund risk management, model validation and identifying distress/red flags. A few older chapters were removed. Use 2026 materials only.

🚨 Major Updates

Current Issues in Financial Markets

Most heavily revised: new coverage of AI & machine learning in risk, advanced scenario generation and stress testing, digital assets, systemic risk and ESG. 2024-or-older notes leave critical gaps.

Exam Structure

FRM Part 2 2026 — Exam Pattern & Dates

Format, rules and the 2026 exam windows for FRM Part 2.

📋 Exam Format

ParameterFRM Part 2
Number of questions80 MCQs
Duration4 hours
FormatComputer-based (CBT)
Question typeMultiple-choice only
Formula sheetNot provided
CalculatorGARP-approved models only
Negative markingNo
PrerequisiteMust pass Part 1 first
Global pass rate~55–60%

📅 FRM Part 2 2026 Exam Dates

WindowExam DatesStandard Deadline
May 2026May 2026 (concluded)Mar 31, 2026
August 2026 ▶August 7–8, 2026June 30, 2026
November 2026 ▶November 14–20, 2026September 30, 2026

Always confirm final dates & fees at garp.org/frm. Part 2 is offered only to candidates who have passed Part 1.

Study Planning

FRM Part 2 2026 — Study Hours by Topic

Recommended hours per topic, based on GARP candidate surveys and RBei student data (~240 hours total).

45–55
Hours
Market Risk Measurement
Advanced VaR, FRTB, backtesting — builds on Part 1
45–55
Hours
Credit Risk Measurement
Hardest section — CVA, structured credit, portfolio models
35–45
Hours
Operational Risk & Resilience
Governance, Basel frameworks, model risk, resilience
30–35
Hours
Liquidity & Treasury Risk
LCR, NSFR, ALM, IRRBB, intraday liquidity
30–35
Hours
Risk & Investment Mgmt
Updated 2026 — model validation, hedge funds, private markets
20–25
Hours
Current Issues 2026
Major updates — AI, scenario generation, ESG, crypto
~240
Total Hours
FRM Part 2
Recommended minimum (candidate surveys)
Salary & ROI

Why FRM Part 2 Is Worth It — Salary & Career ROI

Clearing FRM Part 2 completes the GARP designation (with 2 years' experience) and unlocks senior risk roles across banking and finance.

Role / Experience (India)Typical Salary (LPA)
Entry-level risk analyst (FRM Part 1 + fresher)₹6–9 LPA
FRM-certified risk associate (2–4 yrs)₹9–14 LPA
Risk / market-risk manager (5–8 yrs)₹15–25 LPA
Senior / VP risk (8+ yrs)₹30 LPA+

Salary ranges are indicative of the Indian market and vary by employer, city and experience. RBei Classes alumni work at firms including JPMorgan, Goldman Sachs, HSBC, KPMG and HDFC Bank, with several placed across Dubai, the US, Canada and Singapore.

Expert Strategy

FRM Part 2 2026 — Phase-by-Phase Plan

RBei Classes, an FRM & CFA coaching institute, recorded FRM Part 2 pass rates of 90% (May 2025), 94% (Aug 2025) and 87% (Nov 2025) — calculated for students who actually sat the exam in each window. Here's the framework behind it.

Phase 1 — Core Risk (Weeks 1–8)

  • Start with Market, then Credit and Operational Risk — the 60% weight block
  • Do chapter-level practice questions as you finish each reading, not at the end
  • Drill CVA/DVA, FRTB and backtesting calculations until they're automatic

Phase 2 — Remaining Topics (Weeks 9–14)

  • Lock in Liquidity & Treasury Risk — LCR/NSFR are quick, reliable marks
  • Cover Risk & Investment Management using 2026 materials for the new content
  • Read Current Issues last, from 2026 readings only — AI, scenario generation, ESG

Phase 3 — Mocks & Revision (Weeks 15–18)

  • Take at least 3 full-length CBT mocks under timed conditions
  • Analyse every wrong answer — understand why, not just the right option
  • Prioritise the 60% block for final revision: Market + Credit + Operational Risk
Deepak Goyal, CFA and FRM Charterholder, founder of RBei Classes
Deepak Goyal
CFA Charterholder & FRM Charterholder
CFA Institute GARP FRM

Deepak Goyal is a CFA & FRM Charterholder with ~10 years in investment banking across India, the US and Dubai and 8 years of teaching. He founded RBei Classes in 2018 and has personally mentored 17,000+ CFA and FRM students.

8 yrs
Teaching
17K+
Mentored
94%
P2 Aug'25
View LinkedIn Profile ↗ Verify FRM Credential at GARP ↗
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CFA vs FRM Syllabus →
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FAQ

FRM Part 2 Syllabus 2026 — Frequently Asked Questions

Everything candidates ask about the FRM Part 2 2026 syllabus — answered by Deepak Sir.

The FRM Part 2 2026 syllabus, published by GARP, covers six topic areas across 80 MCQs in 4 hours: Market Risk (20%), Credit Risk (20%), Operational Risk & Resilience (20%), Liquidity & Treasury Risk (15%), Risk & Investment Management (15%) and Current Issues in Financial Markets (10%). Part 2 focuses on applied risk management.
Market Risk, Credit Risk and Operational Risk are each 20% (~16 questions each); Liquidity & Treasury Risk and Risk & Investment Management are each 15% (~12 questions each); Current Issues is 10% (~8 questions). The top three topics together make up 60% of the exam.
FRM Part 2 has 80 multiple-choice questions in 4 hours. It is a computer-based test with no negative marking. Formula sheets are not provided, but a GARP-approved calculator is allowed.
Part 2 saw significant 2026 updates — roughly 12 new chapters added and 9 removed. Risk & Investment Management gained new content on hedge-fund strategies, model validation, alternatives and private markets. Current Issues was heavily revised with AI/ML in risk, scenario generation, digital assets and ESG. Use 2026 materials for these two sections.
Credit Risk Measurement & Management is widely considered the hardest. It's the most mathematically demanding section — CVA/DVA, counterparty credit risk, structured products (CDOs, CLOs) and portfolio credit models — and rewards heavy numerical practice.
GARP candidate surveys suggest around 240 hours. With RBei coaching, most students prepare over 4–5 months at roughly 90 minutes on weekdays plus weekend sessions, supported by mock exams and topic-wise practice questions.
The global FRM Part 2 pass rate is historically around 55–60%. RBei Classes recorded Part 2 pass rates of 90% (May 2025), 94% (Aug 2025) and 87% (Nov 2025), calculated for students who actually sat the exam in each window.
Yes. Your Part 2 result is only recognised once Part 1 is passed. If you sit both on the same day, GARP will not mark Part 2 unless you pass Part 1. Most candidates take the two parts in separate windows.
Yes. GARP keeps the FRM Part 2 2026 syllabus and weights identical across all 2026 windows. The curriculum does not change mid-year, so the same readings and learning objectives apply for August and November 2026.
GARP publishes the official FRM Learning Objectives and Study Guide as a free PDF at garp.org/frm/study-materials. RBei Classes also shares a condensed FRM Part 2 syllabus PDF via WhatsApp and email — fill the enquiry form on this page to receive it.

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