- The FRM Exam tests collective knowledge, and everything being tested on Part I of the exam is necessary for Part II.
- After successfully passing Part I of the Exam, GARP allows 4 years for candidates to pass Part 2 of the exam.
- In order to become certified, GARP allows five years for candidates to complete their work experience requirement after they have passed both parts of the Exam.
GARP updates the FRM Curriculum each year in order to reflect the most up-to-date trends in the financial markets.
The annual update is not well understood by all candidates. For example, the FRM Exam updates more aggressively than the CFA. This has an important implications: the Exam is less predictable; formula and rote memorization is less reliable (because old questions are less likely to repeat); and the the assigned syllabus (including the AIMs) does not necessarily contain exact and literal pointers to exam questions.
The Two Parts of the FRM Exam
Both Parts of the FRM Exam are offered two times per year on the third Saturday of May and November.
- Part I of the Exam, which is offered in the morning, consists of 100 equally weighted multiple-choice questions. Part II of the Exam consists of 80 equally weighted multiple-choice questions, and is offered in the afternoon.
- GARP allows four hours for candidates to complete Part I of the Exam and four hours to complete Part II of the exam.
- FRM Exam candidates must pass Part I before they can take Part II. GARP does allow candidates to sit for both Part I and Part II of the FRM Exam on the same day, however, they must pass Part I before their Part II exam will be graded.
- Most FRM Exam candidates choose to take Part I and Part II on separate exam days.
Part I – Tools Used to Assess Financial Risk
- Quantitative analysis
- Fundamental risk management concepts
- Financial markets and products
- Valuation and risk models
Part 2 – Application of the Tools
- Market risk management
- Credit risk management
- Operational and integrated risk management; including the Basel regulatory framework
- Investment risk management
Exam Registration and Deferrals
Registration and Fees
Candidates can register for the FRM Exam on the GARP website (www.garp.org).
- GARP offers three registration periods: Early, Standard, and Late. There is a difference in price between the three periods.
- FRM Exam candidates can only register for Part II of the exam after they have passed Part I, unless they register to sit for Parts I and II on the same day.
- First time FRM Exam candidates pay a program enrollment fee and an exam fee. The enrollment fee covers the costs that are associated with developing the FRM Program and providing the FRM Exam. All candidates must pay the enrollment fee when they register for the FRM Program for the first time.
An FRM Exam candidate can only defer their registration once to the following test date.
- Candidates must defer their Exam date before the last day of registration.
- GARP charges a $100 (US) fee for deferral of the exam, which must be paid by credit card.
- GARP changes the readings from year to year so any study materials that have been purchased may not be relevant when candidates defer to the next exam year.
The FRM Exam is marked as pass/fail. GARP releases the results through email around six weeks after the FRM Exam is given. GARP provides the FRM Exam candidates with quartile results so they are able to see how they scored on specific areas of the exam in relation to other candidates.
- The passing score cannot be known in advance: GARP grades on a curve.
- Here is their specific method: Let (T) be the average of the Top 5% of all exam scores. After analysis, GARP calibrates an overall passing multiplier; for example, 70%*T = passing score. Due to this method, it is impossible to know the passing score before the exam. However, historical experience suggests that you can miss several questions and still pass the exam. Put another way, the exam is known to be difficult; very few candidates exit the exam having confidently answered all of the questions.