FRM Part 2: Exam Structure, Eligibility, Registration Costs, & Pass Rates

The FRM test can be considered as an international standard of certification, which is relevant to the sphere of risk management. The FRM program is structured into two parts, in which FRM Part 2 is the second and final test that candidates need to pass to achieve the right to be called holders of the FRM certification.

This article will give details about FRM Part 2 concerning the exam format and format, the qualifications for sitting for the exam, the cost of registration as well as the pass rate.

FRM Examination Format & Eligibility Criteria

The FRM examination is a challenging, objective, and closed-book test that aims to measure a candidate’s knowledge and ability to apply risk management practices. 

The second part of the FRM exam will be aimed at checking the candidate’s profound and extensive knowledge of Market Risk, Credit Risk, Operations Risk, Liquidity Risk Management, and Investment Management.

FRM Part 2 Exam Dates 2024

The FRM Part 2 exam is typically offered three times a year – in May, August, and November. For the year 2024, the FRM Part 2 exam dates are as follows:

FRM Part 2 May Exam Dates (2024):

• Registration for Early Birds: December 1, 2023 – January 31, 2024
• Standard Registration: February 1 – March 31, 2024
• Exam Dates: May 18-22, 2024

FRM Eligibility Criteria

To be eligible to take the FRM Part 2 exam, candidates must have already passed the FRM Part 1 exam. Additionally, candidates must have a minimum of two years of relevant work experience in the field of risk management, which can be acquired before or after passing the FRM exams.

FRM Part 2 Exam Result and Pass Rate

As expected, results for the FRM Part 2 exam are usually released about six weeks after the actual examination. It is rare to find out the FRM Part 2 pass rates of different years because they are comparatively always lower than the FRM Part 1 pass rates. For the current pass rates of FRM Part 2 candidates should visit the official website of GARP.

FRM Part 2 Registration and Cost 2024

The registration process for the FRM Part 2 exam is straightforward and can be completed through the official GARP website. Candidates have the option to choose between early registration and standard registration, with the early registration period typically offering a lower fee.

Registration Process

The registration process for the FRM Part 2 exam involves the following steps: The registration process for the FRM Part 2 exam involves the following steps:

1. Go to the official website of GARP and then click on the link of FRM Part 2 exam registration.
2. Choose if you are going to sign up for a new bank of GARP or sign in for the existing one.
3. Choose the exam session for the year to sit the exam; May, August, or November and early registration or standard registration.
4. Enter the basic personal and professional details as mentioned above.
5. Use a credit card or other form of payment that is allowed when making the payment for the registration fee.
6. An email is sent to the registration email provided with the details of registration by GARP.

FRM Cost 

• Early Registration: USD 600
• Standard Registration: USD 800

It is necessary to state that the registration fee is meant for the exam alone and does not cater for any study material or resource that the candidate will require in preparation for the exam.

FRM Part 2 Exam Structure

The format of the assessment organization of the FRM Part 2 is composed of 80 multiple-choice questions that candidates have to complete in four hours. Similar as with any set of questions, the purpose is to test the candidate’s understanding of risk management ideas with regard to real-life scenarios.

Exam Pattern

• 80 multiple-choice questions
• 4-hour exam duration
• No points are deducted for questions that are answered incorrectly or not at all.

Topic Weightage

The FRM Part 2 exam covers six main topic areas, with the following weightage:

• Market Risk Measurement and Management: 20%
• Credit Risk Measurement and Management: 20%
• Operational Risk and Resiliency: 20%
• Measurement and Management of Liquidity and Treasury Risk: 15%
• Risk Management and Investment Management: 15%
• Current Issues in Financial Markets: 10%

FRM Part 2 Scoring System

The GARP has developed the FRM Part 2 exam which is equally based on the number of solution sets determined by the examinee. In this test, students and/or participants are given one point for each correct answer while there is no penalty for wrong answers or when the student/participant chooses not to answer a question.

Answer Grading

The answers are reviewed by a group of professionals of GARP that’s why it is more accurate regarding grading.

Passing Score

Becoming an FRM candidate requires one to, take and pass the FRM Part 2 examination and the pass mark that has to be made depends on the level of difficulty set by the GARP in the examination in conjunction with the candidates. Another factor is the cut-off point which may differ with the various examination sessions; this cut-off point ranges from 60 to 65 percent of the total marks.

FRM Part 2 Exam Subjects

The FRM Part 2 exam covers a wide range of topics related to risk management, including:

1. Market Risk Measurement and Management
2. Credit Risk Measurement and Management
3. Operational Risk and Resiliency
4. Liquidity and Treasury Risk Measurement and Management
5. Risk Management and Investment Management
6. Current Issues in Financial Markets

FRM Part 2 Exam Difficulty

FRM Part 2 is often considered to be more challenging than FRM Part 1 since, among other things, candidates are required to employ the concepts and tools of risk management to solve actual problems. Expected prior knowledge, knowledge which the candidates are presumed to have comprises content knowledge as well as good problem-solving skills.

FRM Part 2 Preparation Tips

To prepare for the FRM Part 2 exam, candidates should:

1. Create a thorough study schedule that addresses every subject on the syllabus.
2. Utilize official study materials and resources provided by GARP, such as the FRM Part 2 study guide and practice questions.
3. Engage in active learning by practicing sample questions and case studies.
4. Attend review classes or workshops to gain insights from experienced instructors.
5. Manage their time effectively and maintain a healthy work-life balance during the preparation phase.

What to Do After Passing FRM Part 2?

The exam FRM Part 2 is the final test that must be passed to obtain the certificate; however, after passing this exam, candidates have to send their detailed work experience to GARP and meet all other requirements to be an FRM holder. CPD can be accumulated from any of the professional activities the FRM holder engages in after being certified For instance, once one obtains the FRM certification he or she is expected to complete 40 hours of continuing professional development within the next two years.

Conclusion

The FRM Part 2 exam is a challenging but rewarding step in the journey to becoming a Financial Risk Manager. By understanding the exam structure, eligibility criteria, registration costs, and pass rates, candidates can better prepare themselves for this crucial milestone. With dedication, hard work, and the right preparation strategies, FRM Part 2 can be conquered, opening up a world of opportunities in the field of risk management.

FAQ’s on FRM Part 2 Details

Is FRM Part 2 harder?

Yes, it is mainly true that the FRM Part 2 exam is more difficult than FRM Part 1 exam. It is oriented towards the practical usage of concepts among the situations and faces real-life risks which increases the level of demanded knowledge.

What months are FRM Part 2 exams?

FRM Part 2 assessment is ordinarily available for sitting three times a year, that is, in May, August, and November.

What is the gap between FRM 1 and 2?

A candidate who wants to take the FRM Part 2 examination first has to clear the FRM Part 1 examination. Unlike, the FRM Part 1 and the FRM Part 2 exams don’t have a fixed timeframe in which candidates are expected to write Since a candidate can take the FRM Part 2 exam in the next available sitting after passing the FRM Part 1 exam.

What is the pass rate of FRM Part 2?

The rate of passing in the FRM Part 2 examination may therefore independently differ from the rate of passing in the FRM Part 1 examination, albeit is usually low. Pass rates for FRM Part 2 can best be obtained by contacting the GARP administration through their official website.

Partham Barot is an ACCA-certified professional. showcasing his expertise in finance and accountancy. he’s revolutionising education by focusing on practical, real-world skills. Partham’s achievements underscore his commitment to elevating educational standards and empowering the next generation of professionals.