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The Best Way to Study for the FRM® Exam

By: Kaplan Schweser
April 6, 2021
Candidate researching the best way to study for the FRM Exam

While everyone hears about the difficulty of the FRM® exam, very few believe it until they experience it for themselves. For the past decade, the pass rates have averaged between 40 to 60 percent. People who are studying for the FRM exam are smart, driven, and want to pass just as much as you do. That means it is crucial that you have a study plan and adhere to it.

We asked over 100 of our former FRM Program students, who now hold FRM certifications, what advice they have for candidates just getting started in their studies. We compiled some of their advice for this article to help you figure out the best way to study for the exam.

Get into a Study Routine Early

Many successful FRM certification holders credit their study routine for their success taking the FRM exams. Not only do you need to study the material, but you also need to be able to apply what you learned to scenarios on the exam. This level of understanding and practical application takes time to develop. Therefore, it is crucial that you get into a study routine early and stick to it.

We recommend following the Prepare > Practice > Perform® method of studying. In the prepare stage, you absorb information through reading and listening to lectures. In the practice stage, you start working through practice problems. In the perform stage, you simulate exam conditions to assess your level of readiness. As you develop your study plan, we typically advise spending:

  • 30–40% of your time preparing

  • 40–50% practicing

  • 20% performing

Are you thinking about taking the FRM Exam? Download the free eBook, Before You Sit for the FRM® Exam, for invaluable advice from successful FRM professionals.

Focus on the Exam Weights and Learning Objectives

You should have a solid understanding of the FRM Program curriculum and how each topic is weighted for the Part I exam. The curriculum is updated every exam cycle, with Part I focusing on four core topics, while Part II focuses on six. Exam weights vary by level and can change slightly from year-to-year, so it is good to be clear on what the weights are for the exam you are taking.

Here are the 2021 topics and weights for Part 1:

  • Foundations of risk management (20%)

  • Quantitative analysis (20%)

  • Financial markets and products (30%)

  • Valuation and risk models (30%)

The topics and weights for Part 2 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%)

Apply Concepts to Real Situations

Just knowing the material isn’t enough to pass the FRM exam. You must be able to take the knowledge and apply it to realistic situations. Most questions are not asking you to regurgitate memorized material. They are asking you to use problem-solving skills.

It's important for FRM professionals to look at a customer's situation and use what they know to help them. Therefore, the FRM exam wants you to demonstrate that you have that skill. Risk management professionals must be able to use all the knowledge they have and focus not only on those risk factors that were relevant in the latest crisis, but be able to set up scenarios on each and every risk factor based on current portfolios, even if those scenarios seem unlikely.

Learn How to Take the Exam

There’s a difference between learning the material and learning how to take the exam. Be sure you practice taking the exam in realistic simulated exam conditions in the last four weeks of studying. Because it mimics the pressure of exam day, the mock exam helps you develop familiarity with the testing conditions and gives you the confidence to go into exam day fully prepared.

Mock exams take you through each question and help you understand where the answer comes from, the calculations required, and what terms they are testing you on. This will help to fill in your knowledge gaps and give you an idea of how you should pace yourself during the actual exam. Mock exams are not a substitute for practice questions or tests, and practice questions and tests are not a substitute for mock exams. Each has its own purpose and uniquely prescribed usage. To further confuse the issue, some exam prep providers market practice tests as mock exams. Do your research to ensure you’re getting the product you’re expecting when you purchase a mock exam.

The appropriate timing for a mock exam is typically a few weeks before you sit for the actual exam. Taking a mock exam too early will not give you an appropriate understanding of how much information you’ll actually retain on exam day. If you take a mock exam too late, you won’t have ample time to improve your performance in identified areas of weakness.

Looking for more guidance on how to prepare for the FRM® exam?  Our FRM exam study packages provide expert instruction, FRM Program study materials, and more. Give yourself the best chance to prepare, practice, and perform on the FRM exam.

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