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Top FRM study tips

Student looking at a computer screen

If you’re studying for the Financial Risk Manager (FRM) exam, you might be wondering how best to learn and retain all the information. But don’t worry, we have some hints and tips to help you.

Really get to grips with the exam topics

The first part of the FRM exam is 100 questions that focus on four topics, weighted as follows:

  • Foundations of risk management - 20%
  • Quantitative analysis - 20%
  • Financial markets and products - 30%
  • Valuation and risk models - 30%

The second of the FRM exam is 80 questions. And the topics and weights are:

  • Market risk measurement and management - 20%
  • Credit risk measurement and management - 20%
  • Operational risk and resiliency - 20%
  • Liquidity and treasury risk measurement and management - 15%
  • Risk management and investment management - 15%
  • Current issues in financial markets - 10%

So it’s important to know a little bit about each concept in each topic.

You may have a question that can be answered with a formula and a calculation, but if you haven’t memorised the formula, you may be able to identify the correct answer if you understand the concept or relationship being tested.

If you remember the basic information on exam day, you will be able to distinguish between relevant and irrelevant information, and narrow down your answer.

It’s never too early to start studying

For both FRM Part 1 and FRM Part 2 you’ll need to study a minimum of 200-240 hours. It’s not worth putting study time off. The exams are practically impossible to pass if you don’t put in the hours, and rely on cramming at the last minute.

The exams test your ability to read and analyse the question, and then apply the concepts you’ve learnt to provide an answer.

You may run into questions that at first don’t seem to relate to anything you’ve studied, but if you’ve crammed your study time, you may be completely overwhelmed. You're going to be tested on topics that require a type of knowledge that can only be gained over a structured course of study, and definitely not mad, last-minute reviews of your study materials.

Studying needs structure and preparation

Studying for an exam is always easier if you have a plan in place. Make a study and revision timetable and stick to it. But don’t try and study for too long - your brain can’t keep up the same level of concentration for hours on end.

Put in breaks where you get up from your desk, get some fresh air, a drink or some food. Turn off your brain for a bit before you jump back in.

Some people prefer to layer their study. This means studying different subjects rather than studying one topic very thoroughly and then moving on. You may find that you can absorb bite size chunks, little and often, easier than trying to get to grips with one massive concept in one go.

Practice in the final weeks before each exam

Make sure you do plenty of practice questions so you get a feel of the exam before you sit it. You will need to have a good grasp of the concepts and how to apply them to scenarios, so keep practicing until it becomes second nature.

FRM students often take time off from work before the exams so they can fully concentrate on the task ahead. If you can’t do this, at least take some time to sit one FRM practice exam.

Treat it as if it’s the real thing. Make sure you’re in a quiet room, no books to refer to, and time yourself. This way you’ll get a feel for the time restraints and the pressure you’re going to feel on exam day. You’ll only have two to three minutes per question, so it’s important to get used to this before sitting the actual exam.

Breathe and try to be calm

Before the exam, set up your game plan. How are you going to approach the exam? Are you going to answer all the short and ebay questions first to build your confidence? Or are you going to tackle the hard ones first and get them out of the way?

Once in the exam, breathe deeply and read the questions properly. Reread if you don’t first understand what it’s asking you. If you still can’t find the best answer, try to eliminate at least one and take an educated guess. It’s always best to answer than to leave it blank - even a guess gives you a 33% chance of being right.

Don’t panic if it seems overwhelming, especially if you’ve come across several tricky questions in a row. Panic will make it worse. You’ll start shutting down, and this isn’t what you need in the middle of an exam. Breathe, put your pencil down, and take a minute to regroup. When you’re ready, start again.

Need FRM exam support?

If you’re worried about your exams and interested in classroom revision, you can talk to your tutor, or contact a tutor by email: citybookings@kaplan.co.uk or by calling 020 7920 3060.

If you’re interested in doing FRM, have a look at our Financial Risk Manager page for more information.