How Challenging is the FRM Exam?

Just how challenging is the FRM Exam? The FRM exam is very quantitative, and it takes a long time to master the curriculum. Only around half of individuals who take the FRM Part II exam pass it, while more people fail FRM Part I than pass it. As a result, only 25% of people who sign up for the exam really pass both sections.  

The variety of questions on the FRM Exam is one explanation for this. This post will assist you in better understanding the difficulty of the exam and how to increase your chances of success.

About the FRM Exam Format

Part I of the FRM Exam focuses on the tools used to assess financial risk. It consists of 100 multiple-choice questions. The exam length is 4 hours. Part II has 80 multiple-choice questions, and it is also 4 hours long. Its focus is the application of the tools for assessing financial risk.  

FRM Exam Pass Rate

The pass rates for the November 2021 FRM Exam was 45% for Part I and 63% for Part II. Since 2013, the pass rates have averaged between 40 to 60 percent.

FRM Exam Topics

The topics covered by both parts of the FRM Exam can change periodically because the world of financial risks is fluid.

FRM Part I Exam Topics and Weights

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

You are more likely to pass the exam if you pass the topics with weights over 20 percent. Based on this table, the topics you really want to get right are financial markets and products, and valuation and risk models.

FRM Part II Exam Topics and Weights

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

For Part II, if you pass the three topics that are weighted 20% and one rated 15%, you have a good chance of passing it.

FRM Exam Study Tips: How to Increase Your Odds of Success

The FRM Exam requires a significant investment of time to be successful. But most of the time, failing a part of the exam is the result of study mistakes and insufficient prep. These tips will help you develop the knowledge and confidence necessary to pass both parts of the FRM Exam.

Tip #1: Put in the study time

GARP says candidates should study at least 200–240 hours for each part of the exam, or 400–480 hours total. Don’t take this suggestion lightly. You’re going to be tested on your ability to read a question, analyze it, and apply concepts to it. Starting early will help ensure you leave yourself enough time to first master the concepts and then practice answering the questions.

Tip #2: Don’t put off studying

Both parts of the FRM Exam are nearly impossible to pass if all you do is last-minute cramming. Instead, you should start studying as soon as you’ve registered. Passing the FRM Exam requires a type of knowledge that can only be gained over a structured, careful course of study—not eleventh-hour, frantic reviews of core materials.

Tip #3: Develop and follow a study plan

A well-thought-out study plan is essential. If you’re not sure how to build one on your own, FRM study materials can help. They offer online and classroom courses, calendar tools that organize the curriculum and materials for you, access to banks of practice questions, and realistic mock exams.

Tip #4: Focus on practicing in the final weeks before the exam

If possible, take some time off from your job in the final weeks before each part of the FRM Exam and save at least one FRM Part I mock exam for that time. Treat this exam as if it were the real thing. Don’t look at it or study questions from it beforehand. Time yourself, so you can get a feel for the time constraints and pressure of exam day.

Tip #5: Have a plan for staying calm on exam day before you get to the exam center

A good strategy is to answer the easy questions first to build confidence. For more difficult questions, reread them to make sure you understand. If you still can’t find the best answer, eliminate at least one option, and take an educated guess. Also, if you’re struggling with several difficult questions in a row, take a deep breath for a few seconds, and remind yourself you can get 30 percent of the questions wrong and still pass.

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