How to prepare for the Financial Risk Management Test

Pass FRM Test On First Attempt

How to prepare for the Financial Risk Management Test
Photo by Alissa De Leva on Unsplash

How to prepare for the Financial Risk Management Test

Financial Risk Management is a test that is taken by people who want to pursue a career in financial risk professionals dealing in financial markets.

Areas of their job include working for banks, insurance firms, accounting firms, and other companies where they are hired to access risk and have got specialized skills and knowledge in assessing risk through deep analysis of the financial markets.

To get the Financial Risk Management certificate it is necessary to pass a 2 part exam and then work for 2 years to get experience in Financial Risk Management. Employment in this sector is expected to grow at a much quicker rate of around 16 percent compared to other occupations from 2008 -2018.

To pass in the Financial Risk Management you need to prepare for it properly. Below is a perfect guide for the preparation of the Financial Risk Management test.

1. Get an idea about all Financial Risk Management topics

There are 2 parts of the exam and part consists of 100 questions while part 2 consists of 80 questions. Part 1 comprises of the following topics and they have the

1.Foundations of risk management (20%)

2.Quantitative analysis (20%)

3.Financial markets and products (30%)

4.Valuation and risk models (30%)

Part 2 comprises of the following topics and they have weights mentioned

1.Market risk measurement and management (20%)

2.Credit risk measurement and management (20%)

3.Operational risk and resiliency (20%)

4.Liquidity and treasury risk measurement and management (15%)

5.Risk management and investment management (15%)

6.Current issues in financial markets (10%)

This exam is not easy and requires hard work and dedication. You need to study for the exam in detail. However, it's impossible to have depth knowledge of everything so at least have an idea about every topic which is mentioned so that you can distinguish between the relevant and irrelevant information when answering the questions. Also, you must have a clear understanding of the concept and the relationship that is being tested in any question so that you can identify the correct answer without wasting time on calculations in every question.

2. Start studying for the exam early

You cannot pass this exam if you will not start studying early. To pass this exam you need to study continuously for hours as this exam is not a piece of cake and the benefits are worth the time which you will spend on studying for the exam. You need to at least 250 hours of dedicated study to pass the exam and this rule holds or both part A and part B of the exam.

In this exam, every question requires analysis and application of concepts. For that, you need to make sure that you have enough knowledge on the particular topic on which the question has been asked because if you will do last-minute study you will just panic and mess up things. As last-minute studies don’t provide a clear understanding and the considerable amount of knowledge which is required for this exam.

3. A proper plan of study and preparation is required

If you are confused about where to start studying for the FRM exam then don’t worry. There are solutions for this available. You can try the FRM pre-Packages. These packages are a great help for beginners. They provide you with online courses and classroom sessions too.

They also organize the entire material for you and help you make a timetable. They give access to test banks for practicing questions and also conduct the mock exams to help you give a clear understanding of where you stand at the moment. If you do this organization it will be easier for you to focus on studying the syllabus and FRM exams need not only learning but practice too because every question requires the use of analytical techniques. To succeed learn and practice with proper resources and proper planning.

4. Practice a lot in the last few weeks before the Test

If you want to pass this exam and became a financial manager to lead a successful life then just don’t study, practice is also important. Try to take out time from your busy schedule and practice only exams a week before apart from revising things. Moreover, keep one FRM exam aside. Practice this exam as this is the real exam.

This must a type of unseen exam for you. Time yourself according to the time which is assigned for this exam in the exam hall. In the exam, you are given a max of 3 minutes for each question so keeping that in mind practice the exam. When you are done with it, mark yourself.

This will help you understand that where do you stand currently and which are the areas where you must concentrate more and the things which need to be polished. Moreover, try to visit the exam center so that you don’t have a problem finding out the proper route to it and you can have a clearer understanding of when to leave your house to reach the exam hall on time. Such things will avoid any uncertain circumstances which might come your way

5. Don't panic and stay calm on the exam day.

You must make sure that you don’t panic otherwise you can mess up things. First of all, read the questions which are short or seem easy .Secondly questions that seem harder just give them a reading twice and try to recall whatever you have studied so far.

Moreover, if you are completely blank about any question still don’t leave it and at least mark an answer because there is a possibility that a guess might be the correct answer.

Moreover to pass the exam you need 70 percent correct answers so even if you are getting are unable to get few questions right it's going to be okay. Just relax and take a deep breath and move to the next ones rather than wasting time on a few.


Passing the FRM exam is not very easy but it's not something impossible. Online courses, classroom sessions, group studies, and practice questions help you grasp a lot of knowledge in the limited time available that would be difficult to get if studying alone. Moreover, try studying with proper planning and management of things. The tips mentioned above will also be quite helpful if you use these to clear r=the exam.

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