Financial risk management refers to a professional designation given by global association of risk professionals. One becomes a pro in risk assessment if they get an FRM designation. An FRM designation empowers one to work in banks, asset management firms, insurance companies and accounting firms.
A financial risk manager is what one becomes after getting an FRM designation. You cannot therefore be competent as a financial professional without a financial risk management designation. However, most people have little knowledge on financial management examinations which limits them in passing the exams. Several guides will help you in passing your FRM examinations.
It is good to know that two parts are involved in an FRM examination. You will be given some multiple choices whereby you are supposed to use a pencil. The FRM part 1 has 100 questions that are equally weighted. Eighty questions that are equally weighted are on the other hand contained in the FRM part 2.
The area of concern in FRM part one is on the fundamental tools and techniques that are used in the management of risks and the theories that underlie it. The FRM part 1 usually takes a maximum of four hours. Quantitative analysis, key concepts on risk management, general knowledge on financial markets and valuation of risk modelling are some of the things focused in FRM part 1. The FRM part 2 on the other hand uses the tools and techniques that have been learnt in part 1. The current market issues and investment management is also looked at depth in FRM 2. You are given a maximum of four hours to cover the FRM part 2 examination. Between 40% and 50% is the pass mark for the two FRM parts.
A standard table with the cumulative distribution function values will be provided to you. Therefore, you will not need to memorize the CDF values. You will as well be provided with the common abbreviations used in an FRM exam.
Since there has been low registered pass rates, you have to study hard in order to get a financial risk management designation. It is recommended that you study for at least two hundred and fifty hours for any FRM test. You can take an FRM exam either in the month of May or November every year. You can have your financial risk management examination in any of the ninety sites that offer it. The FRM site that is near you would be the best to choose.
For a single day, you can sit for the two FRM examinations. However, for the FRM part 2 to be graded, you must have passed FRM 1. You may not pass your FRM exam if you do not work hard.