The FRM (Financial Risk Manager) designation, offered by the Global Association of Risk Professionals (GARP), is one of the most respected certifications in the finance and risk management industry. If you’re planning to pursue FRM, it’s crucial to understand the FRM course syllabus in detail.
In this blog, we’ll break down the FRM Level 1 syllabus and FRM Level 2 syllabus to help you prepare efficiently and focus on the right topics.
FRM Part 1 Syllabus (Level 1)
The FRM syllabus Part 1 focuses on building foundational knowledge in risk management. The curriculum is divided into four key topics:
1. Foundations of Risk Management (20%)
Risk types and risk management functions
Corporate governance
Credit risk, market risk, and operational risk
Basel framework and risk-adjusted return
2. Quantitative Analysis (20%)
Probability distributions and descriptive statistics
Hypothesis testing and confidence intervals
Regression analysis
Time series analysis and volatility estimation
3. Financial Markets and Products (30%)
Structure and functions of financial markets
Derivatives (futures, forwards, options, and swaps)
Bonds, interest rates, and yield curves
Hedge funds, structured products, and commodities
4. Valuation and Risk Models (30%)
Value at Risk (VaR)
Risk-adjusted performance measures
Duration, convexity, and bond valuation
Monte Carlo simulation and scenario analysis
✅ Tip: Focus more on Quantitative Analysis and VaR models, as they form the core of FRM Part 1 problem-solving.
FRM Part 2 Syllabus (Level 2)
The FRM syllabus Part 2 builds on Part 1 by diving deeper into practical applications of risk management.
1. Market Risk Measurement and Management (20%)
Value at Risk (VaR) techniques
Stress testing and backtesting
Credit risk in trading and liquidity risk
2. Credit Risk Measurement and Management (20%)
Credit scoring models
Credit exposure and default risk
Credit derivatives and counterparty risk
3. Operational and Integrated Risk Management (20%)
Operational risk frameworks and mitigation
Enterprise risk management (ERM)
Governance and business continuity
4. Liquidity and Treasury Risk (15%)
Liquidity risk measurement
Funds transfer pricing
Asset-liability management
5. Risk Management and Investment Management (15%)
Portfolio construction and risk budgeting
Performance attribution
Risk-based performance measurement
6. Current Issues in Financial Markets (10%)
GARP provides a set of readings on emerging risk issues such as climate risk, fintech, and regulatory changes. These topics vary each year.
✅ Tip: Keep an eye on GARP’s official updates, especially for “Current Issues” as they are refreshed annually.
How to Use the FRM Syllabus Effectively?
Prioritize topics based on weightage.
Use the FRM Part 1 syllabus to master core concepts.
In FRM Part 2, focus on application, case studies, and recent trends.
Practice with GARP’s sample questions and past mock exams.
Conclusion
Understanding the FRM course syllabus is the first step toward clearing the exams. Whether you’re preparing for the FRM Level 1 syllabus or FRM Level 2 syllabus, a strategic approach and structured study plan can make all the difference.
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