FRM Level 2 Syllabus 2024 - Subjects, Weightage, Exam Pattern, Best Books
FRM Part 2 Syllabus 2024: The Global Association of Risk Professionals (GARP) has released the FRM Level 2 syllabus 2024. FRM certification is getting increasingly popular in India and the number of students wanting to pursue it is only growing. The FRM Part 2 syllabus comprises subjects and chapters that will be covered in the course. The FRM Part 2 comprises six subjects - Market Risk Measurement and Management, Credit Risk Measurement and Management, Operational Risk and Resilience, Liquidity and Treasury Risk Measurement, and Management, Risk and Investment Management, and Current Issues in Financial Markets.
The six subjects of FRM Part 2 are further bifurcated into different chapters and sub-topics. In this article we will discuss the FRM Level 2 syllabus in detail for all subjects and chapters of Part 2.
FRM Part 2 Syllabus and Subject-wise Weightage 2024
Subject | Weightage |
|---|---|
Market Risk Measurement and Management | 20% |
Credit Risk Measurement and Management | 20% |
Operational Risk and Resilience | 20% |
Liquidity and Treasury Risk Measurement and Management | 15% |
Risk and Investment Management | 15% |
Current Issues in Financial Markets. | 10% |
FRM Part 2 Syllabus and Subjects in Detail
Check out the detailed syllabus for all six subjects of FRM Part 2 below:
FRM Part 2 Syllabus - Market Risk Measurement and Management
VaR and other risk measures
Parametric and non-parametric methods of estimation
VaR mapping
Backtesting VaR
Expected shortfall (ES) and other coherent risk measures
Extreme Value Theory (EVT)
Modelling dependence: correlations and Copulas
Term structure models of interest rates
Volatility: smiles and term structures
Fundamental Review of the Trading Book (FRTB)
FRM Part 2 Syllabus - Credit Risk Measurement and Management
Credit analysis
Default risk: quantitative methodologies
Expected and unexpected loss
Credit VaR
Counterparty risk
Credit derivatives
Structured finance and securitization
FRM Part 2 Syllabus - Operational Risk and Resilience
Governance of operational risk management frameworks
Identification, classification, and reporting of operational risks
Measurement and assessment of operational risks
Mitigation of operational risks
Cyber-resilience and operational resilience
Risks related to money laundering, financing of terrorism, financial crime, and fraud
Third-party outsourcing risk
Model risk and model validation
Stress testing banks
Risk-adjusted return on capital (RAROC)
Economic capital frameworks and capital planning
Regulation and the Basel Accords
FRM Part 2 Syllabus - Liquidity and Treasury Risk Measurement and Management
Liquidity risk principles and metrics
Liquidity portfolio management
Cash-flow modelling, liquidity stress testing, and reporting
Contingency funding plan
Funding models
Funds transfer pricing
Cross-currency funding
Balance sheet management
Asset liquidity
FRM Part 2 Syllabus - Risk and Investment Management
Factor theory
Portfolio construction
Portfolio risk measures
Risk budgeting
Risk monitoring and performance measurement
Portfolio-based performance analysis
Hedge funds
FRM Part 2 Syllabus - Current Issues in Financial Markets.
2023 Bank Failures
Artificial Intelligence
Climate Risk
Blockchain, cryptocurrency, and decentralized finance
Digital Resilience
You may also check - FRM Salary in India
FRM Level 2 Exam Pattern 2024
Particulars | Details |
|---|---|
Type of questions | Multiple Choice Questions (MCQs) |
Medium of exam | English |
Total number of questions | 80 |
Maximum marks | 80 |
Marks for each question | 1 mark |
Duration of the exam | 4 hours |
Best Books to FRM Level 2 Preparation
"Financial Risk Manager Handbook, + Test Bank: FRM Part I / Part II" by Philippe Jorion and GARP (Global Association of Risk Professionals)
"Financial Risk Management: A Practitioner's Guide to Managing Market and Credit Risk" by Steve L. Allen
"Value at Risk: The New Benchmark for Managing Financial Risk" by Philippe Jorion
"Risk Management and Financial Institutions" by John C. Hull
"Options, Futures, and Other Derivatives" by John C. Hull
"The Essentials of Risk Management" by Michel Crouhy, Dan Galai, and Robert Mark
"The Handbook of Credit Risk Management: Originating, Assessing, and Managing Credit Exposures" by Sylvain Bouteille and Diane Coogan-Pushner
You may also check - FRM Level 1 Syllabus 2024
Frequently Asked Questions (FAQs)
Yes, the FRM Part 2 is harder than Part 1 as it has a very quantitative and comprehensive syllabus.
Yes, a period of four months is enough for FRM Part 2 preparation.
The FRM level 2 exam comprises 80 multiple-choice questions from six subjects. The duration of the exam is 4 hours and there is no negative marking in the exam.
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