FRM Part 1 - Book 1| Book 2| Book 3| Book 4| - Full Course

Description

What is FRM Level 1?

Business is all about taking a risk and making a profit. The bloodline of a business is finance. This part rules the implementation and resource division of a business. That is why the maximum risk is involved in the allocation of funds in various sectors of a business. To minimize the risk, a business adopts a scientific approach by using various financial tools to visualize the future trends and potential loss threats.

Finance is a dynamic sector and to conquer it every organization needs a team of apt risk management professionals. The uncertainty of the market cannot be overlooked and need to be focused properly to analyze the parameters that control the economy. With the advent of industrialization and growth in an economy, the scientific approach is also evolving. This is why every business needs these professionals to foresee, manage and minimize risk.

Who are Financial Risk Managers?

Financial Risk Managers are the qualified professionals who have passed the stringent level of the certification exams. They have the credible proof of knowledge regarding the prowess of analysis, control, and assessment of potential factors that govern credit risk, liquidity risk and market risk. The professionals play an eminent role in the private as well as the government financial sector like investment banks, finance management firms and other public sectors.

FRM level 1 exam

The Financial Risk Manager is a designated post offered to those who have been internationally certified after passing the FRM Level 1 and 2 Exams. This certification is issued and offered by the Global Association of Risk Professionals (GARB). The exam has two phases, FRM Level I and Level II. Both the exams have a curriculum that extensively covers the major topics involved in financial risk management.

FRM Level 1 is the primary phase of the exam schedule that has a duration of four hours usually conducted in the morning. It has 100 multiple choice type questions based on the subjects that cover the core areas of financial risk management.

The subjects/books involved are:

• Risk management foundation

• Quantitative analysis

• Financial products and Financial market

• Essential risk modeling and valuation

The multiple choice type questions have no negative marking but the candidate must have an apt and in-depth knowledge to answer them properly and score good marks to qualify. Each question will have 4 possible answer options. The questions are set as per the conditions and situations a financial risk manager often faces. In order to maintain the FRM level of qualification and to know the market trends, a certified FRM is recommended to enlist his or her name in Continuing Professional Education Program.

About FRM Level 1 SYLLABUS/BOOKS

The entire syllabus is so well segregated in proper sections that a student or a professional will not have any problem to learn the basic and advanced knowledge of financial risk management subjects.

BOOK 1

The first section deals with an introduction to the world of Risk Management. A novice or an experienced professional must know the segments and factors involved in the risk management sector properly. After familiarizing with the factors, the process is introduced to the aspirant. Risk-adjusted return is taught then followed by Extreme Market Movements. Other than these topics, certainly required insights about Portfolio and Capital Asset Pricing Model (CAPM) will be taught vividly with good examples and case studies. The case studies are the instances that will impart good practical knowledge of the implementation of the models and theories learned by the aspirant.

BOOK 2

The second section deals with statistical tools and probability needed to foresee the future trends and analyze risk. This section will impart knowledge about these mathematical applications vividly so that the students can use it properly in the risk management processes. This segment of the curriculum is entirely based on the Quantitative Analysis part of the FRM level 1 curriculum that has 20% weight in the exam papers.

BOOK 3

The third section covers the essentials of Financial Markets and Products like derivatives, forward and future contracts. After a brief introduction to the basics, the section takes a learner to the advanced level of the financial products like currencies, commodities, equities, fixed income and others in an efficient way.

BOOK 4

The models related to valuation and risk calculation will be covered in this section with an extensive introduction to the Option Greeks. The learner will be taught how the essential risks associated with every desired product will be designated with the Greek alphabets. Then the next part will teach about the bond valuation, its duration, and convexity in details. The entire fourth section deals with the models that are adopted to calculate and analyze risks of various financial products with the help of statistical tools learned in the previous section.

Benefits of FRM certification

After passing FRM Level I, the aspirant become eligible for the next level that is FRM Level II. He or she has to enter for the next level within 4 years of passing the first one. Being a certified professional the aspirant can enjoy the following benefits:

1. Be different from the crowd by having the certificate in your infirmary so that the employers can recognize you easily.

2. The more you read and study about the financial risk the more you become expert in this particular field. The curriculum makes you more knowledgeable than the others.

3. The certification is a label that you have learned all the basic things a financial risk manager must know and can implement them properly to serve the purpose.

4. Adding another feather in the cap equivalent to attracting more and better opportunities towards you.

5. Your salary will take a giant leap. FRM professionals are paid a very handsome salary that other similar non certified professionals can dream of.

6. Become a superior expert in the field and lead an entire team. It will bring reputation and you can be a part of an elite group of risk managers.

Scope of FRM certification

All the financial service providers, both national and international, recognize the certificate. It becomes very easy to demonstrate the prowess of the certificate bearer. Being a certified FRM you can enjoy the distinctive edge over the other risk managing professionals in the market and hence can be a step ahead in the competition.

Almost all companies need the help of the Financial Risk Management firms which on the other hand needs certified professionals like you to maintain their reputation and service. Henceforth the demand of the professionals is not going to fade away anytime soon. The certificate is the solid proof that you are equipped with state of the art techniques and methods to manage risk.

Prospects of FRM

After pursuing the online course and the completing the FRM Level 1 exam, an FRM certified professional can get opportunities on the following grounds:

1. Risk management analysis (consultant or analyst)

2. Risk Manager in Personal banking

3. Managing Director, Corporate Risk

4. Risk Quantification Manager

5. Commercial Risk Manager in large enterprises

6. Operational Risk Manager (Senior section)

7. Credit and Market Risk Specialist

In this prep course, we will be learning as per the followings:

Section 1: FRM Part 1 - Latest Updates

This section provides an overarching view of the FRM Part 1 course, offering insights into the exam's curriculum. It begins with an introductory lecture outlining the key topics covered in subsequent sessions. Pooled Fund Management is explored, focusing on managing collective investments and the challenges associated with this approach. The Mutual Funds series breaks down fund structures, investment strategies, and undesirable trading behavior. The section also introduces Hedge Funds, delving into fee structures, strategies, and Central Counterparty (CCP) transactions. The latter part of this section navigates through CCP transactions, OTC markets, and the valuation of futures contracts.

Section 2: FRM Part 1 - BOOK 1 - Foundations of Risk Management

This section delves into the foundational principles of risk management. Beginning with an overview of the FRM Level 1, it progresses to topics such as quantitative analysis, corporate risk management, and enterprise risk management. Cultural aspects influencing risk-taking in banks are explored in detail. The section further analyzes historical financial disasters, emphasizing the importance of risk data aggregation, efficient market hypothesis, and other key concepts related to financial markets.

Section 3: FRM Part 1 - BOOK 2 - Quantitative Analysis

The focus shifts to quantitative analysis in this section. It starts with mock paper-solving strategies, providing learners with a practical approach to exam preparation. The subsequent lectures cover valuation and risk models, including mean-variance framework, coherent risk measures, Value at Risk (VaR), and stress testing. The section concludes with discussions on pricing conventions, interest rates, bond valuation, and simulation methods.

Section 4: FRM Part 1 - Mock Paper Solving and Evaluating Strategies

This section concentrates on honing exam-solving skills. It covers a range of topics from the syllabus, providing practical insights into tackling questions related to foundation risk management, quantitative analysis, financial market and product, valuation and risk management, and more. The focus is on preparing candidates for the exam environment through the application of learned concepts.

Section 5: FRM Part 1 - BOOK 4 - Valuation and Risk Models

This extensive section covers financial markets and products comprehensively. It begins with an introduction and learning objectives, followed by discussions on mean-variance framework, coherent risk measures, VaR, credit risk, and operational risk. Topics such as stress testing, pricing conventions, interest rates, and bond valuation are explored in detail. The section concludes with an in-depth analysis of derivatives, including options, forwards, and futures, providing a holistic understanding of valuation and risk models.

Section 6: FRM Part 1 - BOOK 3 - Financial Markets & Products

The final section covers a wide spectrum of topics related to financial markets and products. It addresses market risk, credit risk, operational risk, bank regulations, underwriting, IPO, insurance, and pooled funds. Detailed discussions on derivatives, including futures and options trading strategies, bond valuation, and risk management models, enrich the learners' understanding of financial markets and their associated products.

FRM Level 1 Frequently asked questions

What are the requirements to become an FRM certified professional?

The person must appear for FRM Level 1 and after succeeding in the first one he or she can pass FRM Level 2 within 4 years of the first exam date. After passing the second level he or she has 5 years in hand to gather two years of full-time work experience in the particular field. Meeting these requirements one become eligible to get certified.

What qualification is mandatory for the exam?

There is no hard and first rule that the candidate must have a good curricular background in Finance. Anyone can prep for the exams and get certified. Although it is better to have a basic knowledge of finance in order to understand the concepts. Basic mathematical knowledge will also help an aspirant too.

What is the online prep course offering?

The online FRM Level 1 prep course is offering vivid materials on the subjects that are accounted in the FRM level 1 exam. The lectures and the study materials on the website are more than enough for an aspirant to prepare. The case studies and instances are the picked from real-life examples and imparts knowledge in the best way so that the learner can understand how actually the process is executed in the real world. The e-book or pdf format study materials make it easier to carry and prep anywhere the aspirant thins convenient. In fact, the flexibility the online course provides is the best for the working professionals.

Is it better to go with a study plan?

It is always better to have a plan. This is true for the FRM Level 1 exam preparation also. Due to the volume of the syllabus, the candidate must chalk out a plan for allocating time for study and other works. Normally it is suggested by the certified professionals to follow a 15-week plan or 240 hours of studying to get success in the first attempt. Now the figure depends on person to person as per his or her credibility and business.

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