FRM Part 2 Details

This exhaustive blog explains everything about FRM Part 2, such as the FRM part 2 syllabus, exam pattern, fees for registering, FRM part 2 pass percentage, and an entire FRM Part 2 study plan to guide towards success.

What is FRM Part 2 and why is it important?

FRM Part 2 is the second and last level of the internationally accredited FRM course, which extends the groundwork laid in Part 1 to the level of complex risk management applications.

• Part 2 FRM requires practical application of concepts on real-world financial risk situations, whereas Part 1 deals with theoretical concepts.
• Completing both Part 1 and Part 2 along with professional experience earns you the FRM designation, making this exam a key step.
• It is demanded by those aspirants who wish to validate their practical experience in risk management in diverse specialisms.
• Since it entails topics such as liquidity risk, market risk, and current topics, one needs to be acquainted with the FRM part 2 syllabus.
• FRM Part 2 acts as a career enhancer by qualifying professionals for high-responsibility roles in financial risk, treasury, investments, and compliance.

Why is FRM Part 2 a crucial step in the certification?

• It is the last validation point prior to acquiring the official FRM credential.
• It validates your ability to deal with real risk-based situations and will differentiate you in the employment market.
• Several recruiters require Part 2-passed candidates for mid- to senior-level positions in banks and financial institutions.
• Your learnings from Part 2 apply when dealing with business risks and making strategic business decisions.

How does FRM Part 2 differ from Part 1?

• Part 1 deals with foundational tools such as quantitative analysis, financial products, and risk models.
• Part 2 is practical in nature, with case-based questions demanding decision-making ability.
• The question style is more scenario-driven, testing your application rather than just recall.
• The content areas in part 2 of the FRM syllabus are wider and demand conceptual clarity on deeper levels.

What is the format of the FRM Part 2 exam?

Knowing how the exam is structured for the FRM part 2 facilitates a more efficient FRM part 2 study plan and greater confidence in attempting it.

What is the number of questions and duration of the exam?

• FRM Part 2 consists of 80 multiple-choice questions.
• The exam duration is 4 hours in a continuous sitting.
• They require more depth in analysis than in part 1, at times involving interpretation of cases based on scenarios.
• Time management becomes critical due to question complexity.

What kind of questions are asked in the FRM Part 2 exam?

• All the questions are multiple choice but cover considerably practical situations.
• Questions tend to entail interpretation of scenarios rather than straightforward formulas.
• Application of theoretical concepts is assessed more than memorisation.
• There’s no negative marking, encouraging you to attempt every question.
• Such complex scenarios demand comprehension of several areas of the FRM part 2 syllabus within a single question.

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What are the topics covered in FRM Part 2?

The FRM part 2 syllabus consists of six major topics. Each deals with a distinct aspect of risk and finance:

Market Risk Measurement and Management

• Includes VaR (Value at Risk), stress testing, and sensitivity analysis.
• Emphasises the identification, evaluation, and mitigation of market-related risks.
• Needs strong knowledge of derivatives, interest rate risk, and portfolios.

Credit Risk Measurement and Management

• Educates on how to compute and manage risks within credit portfolios.
• It includes exposure at default (EAD), probability of default (PD), and loss given default (LGD).
• Highlights regulatory credit risk frameworks and counterparty risk.

Operational Risk and Resiliency

• Focuses on identifying internal risks such as human error, fraud, and system failures.
• Includes business continuity planning and data governance.
• Introduces methods like risk and control self-assessments (RCSA).

Liquidity and Treasury Risk Measurement and Management

• Explains liquidity coverage ratios and stress testing for liquidity.
• Includes topics on asset-liability mismatches and funding strategies.
• Focuses on managing treasury functions and short-term funding risks.

Risk Management and Investment Management

• Combines investment theory with risk frameworks.
• Includes risk budgeting, portfolio optimization, and performance evaluation.
• Requires knowledge of diversification, beta, and alpha in investment portfolios.

Current Issues in Financial Markets

• Discusses current events and evolving risks in financial systems.
• Topics vary annually, including climate risk, cyber risk, and financial regulation.
• Staying updated with global economic and political trends is essential.

What are the fees and registration deadlines for FRM Part 2?

The FRM fees part 2 are based on your registration period and study preferences.

What are the FRM Part 2 registration fees?

• There is no enrollment fee if you’re already registered for Part 1.
• The early registration cost is about $600.
• The cost of standard registration is about $800.
• You will need to pay the examination fee every time you sit.

What are the early, standard, and late deadlines?

• Early registration opens several months before the exam and offers a discounted fee.
• Standard registration comes next and is the most common option for candidates.
• Late registration, when offered, is the most expensive and has a narrower study window.
• It is important to confirm the deadlines on the official website before every session.

Are there any other associated costs?

• You can decide to purchase third-party course materials, ranging anywhere from $200 to $1000.
• Practice tests, online courses, and coaching are optional but helpful additions.
• You may also defer your examination to the succeeding session for a fee, should the need arise.
• Account for printing fees and web subscriptions to access online content.

What is the pass percentage for FRM Part 2?

Knowing the FRM part 2 pass percentage enables you to manage your expectations appropriately and remain focused.

What is the historical pass rate?

• The average FRM part 2 pass percentage is 50-60%.
• The pass rate in the past few years was about 52%, depending on the examination cycle.
• It is a little less than Part 1 since it is tougher and used for real-world purposes.
• Students who successfully complete Part 1 tend to excel in Part 2 after adequate preparation.

What factors affect the pass percentage?

• Difficulty level of the examination in a particular year.
• Prep time and the degree to which candidates adhere to an effective FRM study plan.
• Exposure to real-world applications and case studies.
• Use of mock tests and reliable study material.
• Dedication to regular preparation and familiarisation with the FRM part 2 syllabus.

How should you prepare for FRM Part 2?

A structured process, starting from a practical FRM part 2 study plan, is the key to confidently clearing this exam.

How to create an effective study plan and manage your time?

• Devote 4–5 months to structured preparation.
• Spend at least 200–300 hours covering the entire FRM part 2 syllabus.
• Divide the study by topic and weightage; focus on complex areas such as market and credit risk.
• Set daily and weekly aims with buffer days to come back to.
• Use a calendar to track progress and adjust based on performance.

What books and resources should you use?

• Begin with the GARP official books that explicitly cover the FRM part 2 syllabus.
• Supplement with study materials from providers such as Schweser, Wiley, or Bionic Turtle.
• Make use of video lectures, flashcards, and summary sheets for rapid revision.
• Join study groups or forums to clarify concepts and share strategies.
• Create summary notes after every topic to simplify revision.

Why are mock tests and past papers important?

• Mock tests simulate the real experience and improve speed and accuracy.
• Help identify weak topics and prioritise them in your study plan.
• Make you familiar with the question style and time allocation.
• Boost confidence and reduce exam anxiety.
• Solve at least 4–5 full-length mocks before the actual exam for optimal preparation.

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What are some final thoughts on clearing FRM Part 2?

It is achievable of FRM Part 2 pass percentage if one is disciplined, sharp-minded, and possesses a strong strategy. All that is needed is to be focused and follow the FRM Part 2 study plan while aiming for the FRM certification.

• Master the FRM part 2 syllabus by spending adequate time on every topic.
• Start early to avoid last-minute pressure and ensure better retention.
• Set mock tests as checkpoints to evaluate your progress.
• Realise that the FRM part 2 pass percentage reveals that roughly half the candidates pass, be sure to be among that half.
• Passing the FRM Part 2 moves you closer to being a certified risk management professional.

FAQs on FRM Part 2 Details

How many questions are there in the FRM Part 2 exam?

There are a total of 80 multiple-choice questions to be answered in 4 hours.

What is the pass rate for FRM Part 2?

The pass percentage of FRM part 2 is typically 50% to 60%. Having a regular and organised FRM part 2 study plan really enhances the likelihood of passing

How much does FRM Part 2 registration cost?

The FRM fees part 2 depend on when exactly you register.

• Early registration: Around $600 
• Standard registration: Around $800 

There is no additional registration fee if you’re already registered for Part 1. There might be extra fees such as study materials, mock tests, or deferral fees.

Is FRM Part 2 more difficult than Part 1?

Yes, when it comes to applications. Whereas Part 1 conducts tests on fundamentals, Part 2 deals with the application of concepts to real-life situations. It requires a firm understanding of the FRM part 2 syllabus and familiarisation with the case-based style of questions. 

Anant Bengani, brings expertise as a Chartered Accountant and a leading figure in finance and accounting education. He’s dedicated to empowering learners with the finest financial knowledge and skills.

Current Role

Co-founder and Executive Director at Zell Education

Education

• Chartered Accountant (CA) from The Institute of Chartered Accountants of India (2010 – 2015)
• Company Secretary (CS) from The Institute of Company Secretaries of India (2011 – 2013)
• Bachelor in Financial Markets, Finance, General from H.R. College Of Commerce & Economics (2010 – 2013)

Location

Mumbai, India

Expertise

CA Certified, CS Certified