The Financial Risk Manager (FRM) Part 2 exam is the final hurdle in obtaining the prestigious FRM certification. It builds on the concepts from Part 1, focusing more on real-world applications of risk management practices. In this guide, we will explore what is FRM Part 2, its syllabus, the best books, exam preparation strategies, important topics, and expert tips to pass the exam successfully.
What is FRM Part 2?
FRM Part 2 is the second and final exam in the FRM certification process, conducted by the Global Association of Risk Professionals (GARP). This exam emphasizes the application of risk management principles across various domains, including market risk, credit risk, operational risk, and liquidity risk.
Key Details About FRM Part 2 Exam:
- Conducted by: Global Association of Risk Professionals (GARP)
- Exam Format: 80 multiple-choice questions
- Duration: 4 hours
- Exam Windows: May, August, and November
- Passing Criteria: No fixed passing score; percentile-based ranking
FRM Part 2 Syllabus
The FRM Part 2 syllabus is divided into six key topics, with varying weights:
- Market Risk Measurement and Management (20%) – VaR methodologies, stress testing, and risk factors.
- Credit Risk Measurement and Management (20%) – Credit risk models, counterparty risk, and credit derivatives.
- Operational and Integrated Risk Management (20%) – Basel framework, risk culture, and emerging risks.
- Liquidity and Treasury Risk Management (15%) – Liquidity stress testing, funding models, and risk governance.
- Risk Management and Investment Management (15%) – Portfolio risk, hedge funds, and risk budgeting.
- Current Issues in Financial Markets (10%) – Emerging risks, fintech, and regulatory changes.
Best Books for FRM Part 2
Choosing the right study materials is crucial for success. Some of the best books for FRM Part 2 include:
- GARP Official Books – The most comprehensive resource covering the entire syllabus.
- Schweser FRM Part 2 Notes – Concise and exam-focused study material.
- Bionic Turtle FRM Part 2 Course – Known for its high-quality question banks and video lectures.
- Wiley FRM Part 2 Books – Offers additional practice questions and explanations.
FRM Part 2 Exam Preparation Strategies
- Create a Study Plan – Allocate at least 4-5 months for structured preparation.
- Understand Core Concepts – Focus on risk models, regulatory frameworks, and financial instruments.
- Practice with Mock Tests – Solve 3-5 full-length practice exams to improve time management.
- Use Multiple Resources – Combine official books with third-party notes and video lectures.
- Stay Updated on Market Trends – Keep an eye on current financial issues relevant to the exam.
- Join a Coaching Program – RBei Classes offers expert-led courses that simplify complex topics.
Important Topics for FRM Part 2
Some high-weighted and frequently tested topics include:
- Expected Shortfall (ES) and Value-at-Risk (VaR)
- Basel III Regulations and Risk Frameworks
- Counterparty Credit Risk (CCR) and CVA
- Liquidity Risk and Treasury Management
- Hedge Fund Risk and Risk Budgeting
- Operational Risk and Cybersecurity Threats
Tips to Pass the FRM Part 2 Exam
- Prioritize High-Weightage Topics – Focus on market and credit risk management first.
- Develop a Conceptual Understanding – Don’t just memorize; understand the logic behind formulas.
- Time Management – Allocate time wisely to each question during the exam.
- Revise Regularly – Consistent revision ensures better retention of key concepts.
- Take Guidance from Experts – Enroll in RBei Classes for structured coaching and expert mentorship.
Conclusion
Passing the FRM Part 2 exam requires dedication, strategic preparation, and the right resources. By focusing on important topics, practicing extensively, and leveraging expert guidance from RBei Classes, you can increase your chances of success.
Need Expert Guidance?
Join our FRM Part 2 coaching program at RBei Classes and get access to high-quality study materials, live classes, and expert mentoring. Contact us today and take your FRM preparation to the next level!
