FRM Level 2 Syllabus 2025 - Subjects, Weightage, Exam Pattern, Best Books
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  • FRM Level 2 Syllabus 2025 - Subjects, Weightage, Exam Pattern, Best Books

FRM Level 2 Syllabus 2025 - Subjects, Weightage, Exam Pattern, Best Books

Sansar Singh ChhikaraUpdated on 25 Mar 2025, 08:46 AM IST

FRM Part 2 Syllabus 2025: The Global Association of Risk Professionals (GARP) has published the FRM Level 2 syllabus 2025. 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.

This Story also Contains

  1. FRM Part 2 Syllabus and Subject-wise Weightage 2025
  2. FRM Part 2 Syllabus and Subjects in Detail
  3. FRM Level 2 Exam Pattern 2025
  4. Best Books to FRM Level 2 Preparation
FRM Level 2 Syllabus 2025 - Subjects, Weightage, Exam Pattern, Best Books
FRM Level 1 Syllabus 2025

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 2025

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 2025

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 2025

Frequently Asked Questions (FAQs)

Q: Is FRM Part 2 harder than Part 1?
A:

Yes, the FRM Part 2 is harder than Part 1 as it has a very quantitative and comprehensive syllabus.

Q: Is 4 months enough for FRM Level 2 preparation?
A:

Yes, a period of four months is enough for FRM Part 2 preparation.

Q: What is the structure of the FRM Level 2 exam?
A:

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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