FRM exam frequently asked questions: FAQs for Certification

FRM exam frequently asked questions: FAQs for Certification

The Role of a Financial Risk Manager (FRM) and Exam Preparation

The continuous growth of globalization and the integration of diverse sectors and economies significantly impact the business world. While this growth offers vast opportunities, it also increases the risks that companies must manage daily. This is where the role of a Financial Risk Manager (FRM) becomes crucial.

An FRM professional is responsible for identifying, assessing, and mitigating financial risks to ensure business stability. Their primary duties include evaluating risk variables, analyzing financial threats, and implementing operational risk management strategies. The ultimate goal of an FRM-certified professional is to minimize financial losses and maximize profits through effective risk management. Given the increasing demand for FRM professionals, earning the FRM certification has become a sought-after credential in the finance industry.

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Preparing for the FRM Exam

The FRM exam is a rigorous, two-part examination administered by GARP (Global Association of Risk Professionals). To earn the FRM designation, candidates must pass both Part I and Part II of the exam and complete two years of full-time work experience within five years.

FRM Exam Structure and Format

  • FRM Exam Part I: Contains 100 multiple-choice questions and focuses on foundational risk management concepts, including quantitative analysis, financial markets, and risk models.
  • FRM Exam Part II: Consists of 80 multiple-choice questions and covers advanced topics like operational risk management, credit risk, and risk measurement.

Key Aspects of FRM Exam Preparation

Preparing for the FRM exam requires dedication and strategic planning. Candidates must review the FRM syllabus and utilize FRM study materials such as question banks, mock exams, and other exam prep materials. Several exam preparation providers, including Bionic Turtle, offer comprehensive study resources to help candidates succeed.

Steps to Take the FRM Exam

  1. Sign up for an exam by registering through GARP and paying the applicable exam fees.
  2. Schedule your exam appointment within the specific exam window and confirm the exam date based on availability.
  3. Use FRM exam prep materials, including practice questions, question banks, and multiple-choice questions to prepare efficiently.
  4. Sit for the FRM exam and apply risk management concepts to real-world scenarios.
  5. Pass the FRM exam the first time by following a structured study plan and using mock exams to simulate the actual exam experience.
  6. Complete two years of full-time work experience within five years to earn the FRM certification.

Why Earn Your FRM Certification?

Becoming an FRM-certified professional opens doors to high-level risk management roles in banks, investment firms, and multinational corporations. Employers value FRM candidates for their ability to manage financial risks effectively. By passing the FRM exam, professionals demonstrate their expertise and commitment to excellence in risk management.

For those preparing for the FRM exam, leveraging exam prep materials, FRM practice tests, and question banks is essential. Understanding exam policies, the FRM certification process, and the responsibilities of the FRM committee will also help candidates succeed.

By mastering the FRM curriculum and preparing effectively, aspiring FRM professionals can earn their FRM certification and advance their careers in financial risk management.

FRM Eligibility & Certification Process

What are the FRM eligibility requirements?

There are no strict educational or professional prerequisites to take the FRM exam. Anyone interested in financial risk management can register and attempt the exam. However, to obtain FRM certification, candidates must meet specific criteria.

How to Become a Certified FRM?

To earn the FRM designation, candidates must:

  • Pass FRM Part I and Part II exams within four years of applying for Part I.

  • Gain two years of relevant work experience in a risk-related role within five years of passing Part II.

FRM Exam Structure

To ensure comprehensive knowledge and proficiency in financial risk management, the FRM exam 2024 consists of three segments. The first two parts, Part I and Part II, are theory-based exams designed to assess candidates' understanding of risk management concepts. The final segment requires practical training, equipping candidates with hands-on experience to apply their theoretical knowledge in real-world financial scenarios.

Part I: Exam Details & Syllabus

  • Format: 100 multiple-choice questions (computer-based)

  • Duration: 4 hours

  • Exam Windows: May, August, and November

  • Language: American English

  • Core Topics Covered:

    • Risk models

    • Quantitative analysis

    • Financial markets and products

    • Valuation and risk management fundamentals

Key Considerations: Candidates must have a strong grasp of core formulas and calculations, as no formula sheets are provided during the exam.

Part II: Exam Details & Syllabus

  • Format: 80 multiple-choice questions (computer-based)

  • Duration: 4 hours

  • Exam Windows: May, August, and November

  • Language: American English

  • Core Topics Covered:

    • Market risk measurement and management

    • Credit risk measurement and management

    • Operational and integrated risk management

    • Liquidity and treasury risk management

    • Risk management and investment management

    • Current issues in financial markets

Note: Candidates who take Part I and Part II on the same date must pass Part I before their Part II exam is graded.

Practical Training Requirement

After passing both exam parts, candidates must complete two years of relevant finance-related work experience to officially earn the FRM certification. This hands-on experience solidifies their expertise in risk management.

FRM Exam Fees & Cost Breakdown

The cost of pursuing the FRM designation varies based on the exam level and registration deadline. The fees differ for new and returning candidates.

FRM Exam Part I

For New Candidates:

  • Early registration: USD 1,000 (USD 400 enrollment fee + USD 600 exam fee)

  • Standard registration: USD 1,200 (USD 400 enrollment fee + USD 800 exam fee)

For Returning Candidates:

  • Early registration: USD 600

  • Standard registration: USD 800

FRM Exam Part II

  • Early registration: USD 600

  • Standard registration: USD 800

Can I Study for the FRM Exam Online?

Yes! Many top-rated training institutes offer online FRM courses with flexible classes, comprehensive study materials, and expert guidance. Institutions like NorthStar Academy provide structured coaching to help candidates excel.

Are There Any Exemptions for the FRM Exam?

The FRM exam does not offer exemptions for any candidates. Every aspirant must pass both Part I and Part II to earn the certification. For any updates on exemption policies, visit GARP's official website.

How to Register for the FRM Exam?

Registration for the FRM exam is straightforward:

  • Visit GARP’s official website and follow the registration process.

  • Choose between early or standard registration for cost benefits.

  • There are no educational prerequisites to register.

When is the FRM Exam Conducted?

The FRM exam is held three times a year, in May, August, and November. Candidates should check GARP’s official website for exact dates.

What is the FRM Exam Pass Rate?

Pass rates vary each year. However, on average:

  • FRM Part I pass rate: 40%-50%

  • FRM Part II pass rate: 50%-60%

The difficulty level makes dedicated preparation essential for success.

Top Tips to Pass the FRM Exam

The demand for certified financial risk managers is high across industries, especially in banking, insurance, and regulatory agencies. Whether you are a student or a working professional, the following exam preparation tips can significantly enhance your success rate:

  1. Start Early & Space Out Your Studies

    • Avoid last-minute cramming.

    • Distribute study sessions over several months for better retention.

  2. Utilize a Structured Study Plan

    • Follow a dedicated study schedule.

    • Use a study planner to track your progress.

  3. Prioritize Topics Based on Weightage

    • Focus on high-weightage topics first.

    • Pair complex subjects with lighter ones to maintain momentum.

  4. Supplement Your Studies with Third-Party Resources

    • Use reputable external study materials alongside GARP’s official resources.

    • Solve practice questions from different sources.

  5. Practice Timed Mock Exams Closer to the Exam Day

    • Simulate the real exam environment with timed practice tests.

    • Identify and strengthen weak areas based on practice results.

By following these proven study strategies and maintaining discipline, you can successfully pass the FRM exam and build a rewarding career in financial risk management.

  • In November 2023, the FRM pass rates were 45% for Part 1 and 53% for Part 2. 

  • The pass rate for FRM Part 1 has consistently dipped below the 50% standard in the last decade, including a reduction from 46% to 42% between November 2012 and the following year.

All said and done, if you are zealous enough to pursue FRM and crack it, you can. Don’t let pass rates dampen your spirit to succeed. 

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  1. How do I prepare for the FRM exam?

You should plan and space your studies out. Stick to a study plan, prioritise topics based on weight, and join a top online training institute to avail yourself of the best guidance and mentorship. NorthStar Academy can be a great choice. Avoid skipping topics, focus on practice questions, take breaks, and be mindful of exam timing.

  1. Are there any study materials provided by the FRM Institute?

GARP offers study materials, practice exams, and information on approved third-party providers for the FRM Exam. Students can avail of study guides, ebooks, or print books.

  1. Can I work while studying for the FRM exam?

Yes, you can work while studying for the FRM exam. You have to follow a balanced plan and use your free time effectively. When you join a top-rated online training institute like NorthStar Academy, you can study at your convenience in flexibly designed online classes, enjoy pocket classrooms and use apps to learn, record classes for later use, and much more. This way, you achieve a work-study balance. 

  1. What career opportunities are available after becoming a certified FRM?

Once you become a certified FRM, you can choose from various job roles, such as:

·Risk Manager

·Risk Analyst 

·Market Risk Analyst

·Regulatory Risk Analyst

·Risk Consultant 

·Chief Risk Officer

·Asset Manager

·Credit Risk Manager 

·& the list goes on.

  1. Is the FRM designation recognised worldwide?

Yes, the FRM designation is recognised worldwide. It provides professionals with a boost to their resume. From investment banking to risk management or job roles dedicated to any risk profile – you can take it up and dominate the risk segment of the finance space. 

  1. What is the process to be a certified FRM?

To earn the FRM Certification:

· You have to pass both parts of the FRM exam.

·You need to have two years of relevant work experience. 

·Part I must be taken before Part II.

  1. Which countries accept FRM?

The FRM certification is globally recognised. It is accepted in various countries like:

·The UK

·The US

·China

·Singapore, and

·Various other nations in Asia.

  1. Are there any renewal requirements for my FRM certification?

·To maintain the value of the Financial Risk Manager designation, you should renew your certification by December 31st of each year. 

·The FRM certificate is valid for two years. 

·You should keep yourself busy with Continuing Professional Development activities to evolve as a professional. 

  1. Can I become a certified FRM without passing all the exams?

No, you cannot. You have to appear and come out successful in clearing both parts of the FRM exam to obtain the certification. 

  1. Is there a time limit for completing the FRM designation?

You must pay attention to the time limits that the FRM certification demands. 

·Upon passing Part One, you have to pass Part Two in 4 years.

·After passing Part Two, you have 5 years to gain work experience verification from the date of passing the exams.

  1. What is the difference between FRM and finance courses?

The FRM course lets you absorb all the concepts and topics related to the risk segment so that you can become a well-rounded risk professional. Other financial certifications have different areas of specialisation, and it depends on your area of interest and which finance course you will choose.

  1. Can I study for the FRM exam if I already have a degree in another field?

Yes, absolutely. If you already have a degree and pursue FRM, it adds value to your resume and lets you grab awesome job roles where your expertise is required. You get a high pay package and job satisfaction. You can also travel globally and let your career grow overseas. 

  1. Are there any scholarships available for FRM candidates?

·Faculty and students participating in Academic Partner programs can get scholarships that fully cover the registration fee for the FRM Part I Exam. 

·Each year, program administrators have the authority to give these scholarships to up to six students and one faculty member. 

  1. How do I find an FRM-approved employer for work experience?

You should visit the GARP website to check the list of approved employers. You can also connect with industry professionals and network within the risk management community to explore potential opportunities in your preferred risk domain. 

  1. Can I study part-time for the FRM exam?

Yes. However, you must be committed and dedicated. Success typically demands commitment and a premier online training institute, NorthStar Academy, can help you in achieving balance in juggling with your studies and other commitments. 

  1. What are the different study options for the FRM exam?

You can choose from a variety of study options. You can choose to self-study using official study materials, attend classroom-based training, enrol in online courses, or join study groups to understand the exam content in a much better way. Choosing an online training institute is always a wise move to make. Talk to the experts at NorthStar Academy to learn more about the benefits. 

  1. How do I apply for exemptions based on prior qualifications?

You should check the GARP website to find out whether any such exemption is available. 

  1. Can I retake the FRM exams if I fail?

Yes, you can do so. 

  1. How do I know if my employer will sponsor my FRM studies?

Discuss this with your manager or HR department. Inquire about the employer’s policies on professional development and continuing education support about FRM studies.

  1. Is there an age limit for pursuing the FRM designation?

No age is not a factor in restraining you from enrolling for the FRM course. 

  1. Can I study for the FRM exam if English is not my first language?

The FRM exams are conducted solely in English, especially American English, although GARP acknowledges that not all candidates have English as their native language. Therefore, during the exam development, GARP strives to avoid using terms and colloquialisms that may be confusing for non-native American English speakers.

  1. What support does the FRM Institute provide for candidates with disabilities?

You have to get in touch with GARP to know about such options. 

  1. Can I study the FRM course after earning another professional certification?

Yes, you can do so. When you get combined knowledge, you can have a better and more thriving financial career. You can become a risk professional after passing FRM. 

  1. Are there any restrictions on where I can take the FRM exam?

· Computer-based testing for the FRM Exam does not support remote or in-home proctoring.

·You must physically go to a testing centre on exam day. 

  1. How do I find an FRM prep provider?

You can easily find many online training institutes offering coaching assistance. You should choose the best one, NorthStar Academy. You get qualified guidance, tips, test-taking strategies, revision kits, mentorship from industry experts, and an engaging online learning environment. 

  1. Can I study for the FRM exam without relevant work experience?

You can. However, to achieve the FRM certification, you must pass two exams and show a minimum of 2 years of employment history or applicable work experience.

  1. Can I defer my FRM exam registration if I'm unable to sit for the exam?

Yes, but you have the option to defer it only to the next exam cycle. Also, this can only be done once. 

  1. What is the FRM Experience Verification process?

To showcase work experience for the FRM exam, you must describe your professional role in managing financial risk in at least four to five sentences. 

The application to submit work experience can be conveniently done online. Note that the work experience described should not exceed 10 years before passing FRM Exam Part Two.

  1. Can I pursue the FRM designation if I have a criminal record?

Contact GARP at https://www.garp.org/contact-us to learn more about this. 

  1. How do I order study materials from the FRM Institute?

You should check out the GARP website to purchase and download the same. 

  1. I work full-time. Can I prepare for the FRM exam? 

Yes, but you need to prioritise and value time. Take a break of at least two or three weeks before the exam day. This will give you ample time to practice questions and review them. Stepping away from work stress and deadlines can greatly enhance your focus on the exam and improve your chances of success.

  1. Can I pursue the FRM designation if I am already working in finance?

Yes. It can enhance your professional value even more. 

  1. How do I check my FRM exam results?

After the exam window closes, GARP promptly scores the exams. You receive notifications via the GARP candidate portal when the results are out.

  1. Are there any discounts available for FRM exam fees?

Enrolling during the early registration period offers a discounted exam fee. 

  1. Can I study for the FRM exam without a college degree?

Yes. You need not fulfil any professional or educational prerequisites. 

  1. What is the FRM Continuing Professional Development (CPD) requirement?

·Once certified as an FRM or ERP professional, you'll enter a CPD cycle, requiring you to earn 40 credits every two years. 

·Ensure renewal of your CPD licence by December 31st every 2 years to maintain the certification.

  1. How do I maintain my FRM certification?

·You have to stay up-to-date with the latest best risk management practices. 

·Earning 40 hours of Continuing Professional Development every 2 years will help you do that as an FRM-certified professional.

Accelerate Your FRM Exam Preparation with NorthStar Academy

The Financial Risk Manager (FRM) certification is a short yet comprehensive course that, with dedication, can be completed in just a year. However, self-studying alone may not always be sufficient to keep up with the intensive curriculum. Enrolling in a structured FRM course coaching program at NorthStar Academy can provide the right guidance and streamline your exam preparation for optimal success.

At NorthStar Academy, expert faculty equip you with essential strategies for time management, maintaining composure under pressure, and tackling challenging questions effectively. Learn how to navigate the FRM exam with confidence by leveraging expert tips from top-tier instructors.

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Why Choose NorthStar Academy for FRM Exam Preparation?

The online learning environment at NorthStar Academy is designed to support both students and working professionals, enabling them to progress steadily toward their academic goals. Here’s what makes it an ideal choice for your FRM exam prep:

✔ Small-Sized Online Classes – Personalized attention for better conceptual clarity.

✔ Comprehensive Course Materials – Sourced from top-rated learning partners for in-depth understanding.

✔ Group Studies & Peer Interaction – Engage in collaborative learning for motivation and support.

✔ Live Interactive Sessions – Get real-time doubt clearance and insights from experienced faculty.

✔ WhatsApp Communication – Stay connected with mentors and peers for continuous learning.

Don’t leave your success to chance—join NorthStar Academy today and gain the expert coaching assistance you need to crush the FRM exams with confidence! Connect with us now!

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