FRM Part-II - Self Study Tips

Sr.
Particulars
No.
From Exam Perspective, FRM Part-II is easy but from Curriculum Perspective it is very challenging. It is
1
very difficult to read and study each and every topic / chapter in FRM Part-II.

There are 103 chapters and more than 600 concepts. Various concepts are theoratical and hence
2
rigorous reading shall be required in those cases.

According to me, more than 600 hours are required for preparation. If anyone is not having 600 hours
3
then he / she needs to skip some theory chapters and focus on conceptual chapters.

Concept Understanding is the most important. Without understanding the concepts, it is very difficult to
4
clear the exam.

Many concepts are difficult to understand hence solve MCQ to understand the concepts better. I would
suggest following method to solve each & every MCQ:
5
Hide the answer and then read question. Then try to give correct answer in a way we do in exam.
This will boost the confidence.

6 One can use following, method to study and prepare:

i. View 1st Chapter's Video Lectures from Ulurn,
ii. Read relevant SSEI Hand notes / Schewser Notes for that chapter,
iii. Solve Chapter-wise MCQ from Analyst Prep for that chapter,
iv. Then go for next chapter and do the same for all chapters one by one.
 Don't view all lectures together and then read all the chapters together.
7
Instead view the lecture one-by-one, study the relevant notes along side and then solve the MCQ of the said
chapter along with viewing lectures and reading the notes. This will make the concepts easy to remember.

Categorise / mark the MCQs in following ways:

Category A: Important and difficult question (Couldn't understand first time),
Category B: Formula based and not much difficult,
8
Category C: Easy and no need to do it again.

At the time of revision, just revise the Category A & B questions once again.

Prepare a separate hand-written sheet for formulas to cram / remember. This will be helpful a day
9
before exam.

One can use Schweser's Secret Sauce (Summary Notes) for reading theory chapters (mainly in case
10
of Operational Risk)

Current Issues are very much important and one should study the same thoroughly. Even GARP also
11 communicates the same to each and every student through a separate mail before the exams. Hence study
the chapters of Current Issues Properly.

Mock papers need to be given as it is very much important but don't worry much about the Mock paper's
12
result. Actual Exam paper is much more different than mock papers.

13 Planning is a key to success. Hence make granular level plan for your studies.

14 Kindly revise all the concepts once before the exam

 FRM Book Wise Syllabus and bifurcation - Total Plan of 70 days

Book
Sr. Difficulty
Wise Chapter Name Bifurcation
No. Level
Chapter
Book-1: Market Risk - Time Required: 12 Days

1 1 Estimating Market Risk Measures: An Introduction and Overview Practicals Easy

Conceptual Theory
2 2 Non-Parametric Approaches Easy
+ Practicals

3 3 Parametric Approaches (II): Extreme Value Conceptual Theory Difficult

4 4 Backtesting VaR Conceptual Theory Difficult

5 5 VaR Mapping Conceptual Theory Difficult

Messages From the Academic Literature on Risk Measurement for

6 6 Pure Theory Easy
the Trading Book
Conceptual Theory
7 7 Correlation Basics: Definitions, Applications, and Terminology Easy
+ Practicals
Empirical Properties of Correlation: How Do Correlations Behave Conceptual Theory
8 8 Easy
in the Real World? + Practicals

9 9 Financial Correlation Modeling—Bottom-Up Approaches Conceptual Theory Difficult

10 10 Empirical Approaches to Risk Metrics and Hedging Practicals Difficult

Conceptual Theory
11 11 The Science of Term Structure Models Difficult
+ Practicals
The Evolution of Short Rates and the Shape of the Term Conceptual Theory
12 12 Difficult
Structure + Practicals
Conceptual Theory
13 13 The Art of Term Structure Models: Drift Difficult
+ Practicals
Conceptual Theory
14 14 The Art of Term Structure Models: Volatility and Distribution Difficult
+ Practicals
Conceptual Theory
15 15 Volatility Smiles Difficult
+ Practicals

16 16 Fundamental Review of the Trading Book Pure Theory Easy

Book-2: Credit Risk - Time Required: 13 Days

17 1 Fundamentals of Credit Risk Pure Theory Easy

18 2 Credit Risk Governance Pure Theory Easy

19 3 Credit Risk Management Pure Theory Easy

20 4 Capital Structure in Banks Practicals Easy

21 5 Introduction to Credit Risk Modeling and Assessment Practicals Difficult

Conceptual Theory
22 6 Credit Scoring and Rating Easy
+ Practicals

23 7 Credit Scoring and Retail Credit Risk Management Pure Theory Easy

24 8 Country Risk: Determinants, Measures, and Implications Pure Theory Easy

 FRM Book Wise Syllabus and bifurcation - Total Plan of 70 days

Book
Sr. Difficulty
Wise Chapter Name Bifurcation
No. Level
Chapter

25 9 Estimating Default Probabilities Practicals Difficult

26 10 Credit Value at Risk Practicals Difficult

27 11 Portfolio Credit Risk Practicals Difficult

Conceptual Theory
28 12 Structured Credit Risk Easy
+ Practicals
Conceptual Theory
29 13 Credit Risk Difficult
+ Practicals
Conceptual Theory
30 14 Credit Derivatives Difficult
+ Practicals

31 15 Derivatives Pure Theory Easy

Conceptual Theory
32 16 Counterparty Risk and Beyond Easy
Only
Conceptual Theory
33 17 Netting, Close-Out, and Related Aspects Easy
Only
Conceptual Theory
34 18 Margin (Collateral) and Settlement Easy
Only
Conceptual Theory
35 19 Central Clearing Easy
Only

36 20 Future Value and Exposure Practicals Difficult

37 21 CVA - Credit Value Adjustment Practicals Difficult

38 22 The Evolution of Stress Testing Counterparty Exposures Pure Theory Easy

Conceptual Theory
39 23 An Introduction to Securitization Easy
+ Practicals

Book-3: Operational Risk - Time Required: 7 Days

40 1 Introduction to Operational Risk and Resilience Pure Theory Easy

41 2 Risk Governance Pure Theory Easy

42 3 Risk Identification Pure Theory Easy

43 4 Risk Measurement and Assessment Pure Theory Easy

44 5 Risk Mitigation Pure Theory Easy

45 6 Risk Reporting Pure Theory Easy

46 7 Integrated Risk Management Pure Theory Easy

47 8 Cyber-Resilience: Range of Practices Pure Theory Easy

48 9 Case Study: Cyberthreats and Information Security Risks Conceptual Theory Easy
 FRM Book Wise Syllabus and bifurcation - Total Plan of 70 days

Book
Sr. Difficulty
Wise Chapter Name Bifurcation
No. Level
Chapter

Sound Management of Risks Related to Money Laundering and

49 10 Pure Theory Easy
Financing of Terrorism

50 11 Case Study: Financial Crime and Fraud Conceptual Theory Easy

51 12 Guidance on Managing Outsourcing Risk Pure Theory Easy

52 13 Case Study: Third-Party Risk Management Conceptual Theory Easy

Case Study: Investor Protection and Compliance Risks in

53 14 Conceptual Theory Easy
Investment Activities

54 15 Supervisory Guidance on Model Risk Management Pure Theory Easy

55 16 Case Study: Model Risk and Model Validation Conceptual Theory Easy

56 17 Stress Testing Banks Pure Theory Easy

Risk Capital Attribution and Risk-Adjusted Performance

57 18 Practicals Easy
Measurement

58 19 Range of Practices and Issues in Economic Capital Frameworks Pure Theory Easy

Capital Planning at Large Bank Holding Companies: Supervisory

59 20 Pure Theory Easy
Expectations and Range of Current Practice
Conceptual Theory
60 21 Capital Regulation Before the Global Financial Crisis Difficult
+ Practicals
Solvency, Liquidity, and Other Regulation After the Global Conceptual Theory
61 22 Difficult
Financial Crisis + Practicals
Conceptual Theory
62 23 High-Level Summary of Basel III Reforms Difficult
+ Practicals
Conceptual Theory
63 24 Basel III: Finalizing Post-Crisis Reforms Difficult
+ Practicals

Book-4: Liquidity Risk - Time Required: 8 Days

Conceptual Theory
64 1 Liquidity Risk Difficult
+ Practicals
Conceptual Theory
65 2 Liquidity and Leverage Difficult
+ Practicals

66 3 Early Warning Indicators Conceptual Theory Easy

67 4 The Investment Function in Financial-Services Management Conceptual Theory Easy

68 5 Liquidity and Reserves Management: Strategies and Policies Conceptual Theory Easy

69 6 Intraday Liquidity Risk Management Conceptual Theory Easy

70 7 Monitoring Liquidity Conceptual Theory Easy

71 8 The Failure Mechanics of Dealer Banks Conceptual Theory Easy

72 9 Liquidity Stress Testing Pure Theory Easy

 FRM Book Wise Syllabus and bifurcation - Total Plan of 70 days

Book
Sr. Difficulty
Wise Chapter Name Bifurcation
No. Level
Chapter

73 10 Liquidity Risk Reporting and Stress Testing Pure Theory Easy

74 11 Contingency Funding Planning Conceptual Theory Easy

75 12 Managing and Pricing Deposit Services Conceptual Theory Easy

76 13 Managing Nondeposit Liabilities Conceptual Theory Easy

Conceptual Theory
77 14 Repurchase Agreements and Financing Difficult
+ Practicals
Conceptual Theory
78 15 Liquidity Transfer Pricing: A Guide to Better Practice Difficult
+ Practicals
The US Dollar Shortage in Global Banking and the International
79 16 Conceptual Theory Easy
Policy Response
Covered Interest Parity Lost: Understanding the Cross-Currency Conceptual Theory
80 17 Difficult
Basis + Practicals

Risk Management for Changing Interest Rates: Asset-Liability Conceptual Theory

81 18 Difficult
Management and Duration Techniques + Practicals

82 19 Illiquid Assets Conceptual Theory Difficult

Book-5: Investment Risk - Time Required: 7 Days

Conceptual Theory
83 1 Factor Theory Difficult
+ Practicals
Conceptual Theory
84 2 Factors Difficult
+ Practicals
Conceptual Theory
85 3 Alpha (and the Low-Risk Anomaly) Easy
+ Practicals
Conceptual Theory
86 4 Portfolio Construction Difficult
Only

87 5 Portfolio Risk: Analytical Methods Practicals Easy

Conceptual Theory
88 6 VaR and Risk Budgeting in Investment Management Easy
+ Practicals

89 7 Risk Monitoring and Performance Measurement Pure Theory Difficult

90 8 Portfolio Performance Evaluation Practicals Easy

Conceptual Theory
91 9 Hedge Funds Easy
Only

92 10 Performing Due Diligence on Specific Managers and Funds Pure Theory Easy

93 11 Predicting Fraud by Investment Managers Pure Theory Easy

Book-5: Current Issues - Time Required: 3 Days

Review of the Federal Reserve’s Supervision and Regulation of

94 1 Conceptual Theory Easy
Silicon Valley
 FRM Book Wise Syllabus and bifurcation - Total Plan of 70 days

Book
Sr. Difficulty
Wise Chapter Name Bifurcation
No. Level
Chapter

The Credit Suisse CoCo Wipeout: Facts, Misperceptions, and

95 2 Conceptual Theory Easy
Lessons for Financial Regulation

96 3 Artificial Intelligence and Bank Supervision Pure Theory Difficult

Financial Risk Management and Explainable, Trustworthy,

97 4 Pure Theory Difficult
Responsible AI

98 5 Artificial Intelligence Risk Management Framework Pure Theory Difficult

99 6 Climate-Related Risk Drivers and Their Transmission Channels Conceptual Theory Easy

100 7 Climate-Related Financial Risks—Measurement Methodologies Pure Theory Difficult

Principles for the Effective Management and Supervision of

101 8 Pure Theory Difficult
Climate-Related Financial Risks

102 9 The Crypto Ecosystem: Key Elements and Risks Pure Theory Difficult

Digital Resilience and Financial Stability: The Quest for Policy

103 10 Conceptual Theory Easy
Tools in the Financial Sector

Revision and Mock papers - 20 Days