2019/2020 Curriculum Change Analysis Spreadsheets

[David Harper CFA FRM]

Hi @flyingpan Right, my honest opinion is that it is too much change. GARP does not (has never) adequately incorporated the impact on EPPs. You will notice I've already starting writing questions for the fresh material (https://forum.bionicturtle.com/forums/todays-daily-questions.53/ ), as usual. This is one of those years where the stress, to which you refer, will be noticeable on all EPPs. However, "do you think we would have enough time to prepare for the May exam?" is arguably a different question: all candidates play on the same level playing field. One major problem that I have with major change (like this year) is that GARP will not be able to comprehensively test the new material: it is much over-assigned relative to the number of questions, and for the new topic, there is no track record. So the new T8 is asking for a lot of detail candidates will not need; however, we have no idea which detail that is (!), forcing everybody to study everything. So, what I would say is that GARP puts all of us (candidates and EPPs) in this position. Personally, I think it is sub-optimal.

Another reality is that next year the syllabus will moderate/stabilize in comparison; actually, by definition, next year almost must moderate ("calm down") relative to this year's big changes (including source material in P1). Right??! To me, the implication of this reality is that next year's candidates will feel like they have more time (but, again, they also will be playing "on a level playing field" as the exam does grade on a curve). That's my opinion. As an EPP with an open/transparent forum, Nicole and I have years of experience dealing with the implied pressure We do the best we can. Thanks,

 

[Serdar7891]

In my opinion everything seems to point to the the fact that GARP is planning on introducing GARP FRM Part 3 in several years.

 

[David Harper CFA FRM]

@Serdar7891 I realize you prefaced with "in several years," but I sure hope such a plan is not in the works: GARP should somewhat stabilize the first two parts before even thinking about a third part. I will personally be in disfavor of such a plan unless and until GARP brings more stability to the first two parts. Under their current rate of change, I don't see how the EPPs could keep up with a third part. FWIW.

 

[Mohammad Abdul Awal]

I have schweser books of year 2019( part 1). I am planning to sit for November'2020. Should I buy books once again? If not, where can I get the newly added chapters now?

TIA.

 

[ag0511]

I found it most perplexing that Liquidity risk has received such late recognition to be added or segregated as a separate section.A overview of the section underlines that some of the chapters were written,around 7-8 years ago.Delayed action on this,has deprived,thousands of passed candidates in some previous years from the most relevant and updated body of knowledge related to Risk Management.

Cyber risk,which is appearing as a CI reading in recent years or in some sub sections of certain chapters of main syllabus.May possibly get added as a chapter/set of chapters in the main syllabus in future.And it's extent of threat and pervasive nature could be such that it might as well evolve into a separate field of risk management studies.

 

[Nicole Seaman]

I have schweser books of year 2019( part 1). I am planning to sit for November'2020. Should I buy books once again? If not, where can I get the newly added chapters now?

TIA.

Hello @Mohammad Abdul Awal

If you are looking for Kaplan Schweser materials, I would say the best place to get them would be their website. Since you are on the Bionic Turtle website, I also want to let you know that we carry all of the materials that you would need to study too. We are happy to help our competitor's customers, however, I feel better knowing that I made you aware of our study materials since you came to our website to post

 

[Rohit]

Increased number of reading in FRM Part 2 in 2020 than 2019. Not sure what the logic behind this increase in workload is.

 

[Lmgroves1]

I passed part 1 in November, and have registered for part 2 in May as I did not want to have a break. I felt that although the material in part 1 was extremely extensive, it was fair. There was some, but minimal, overlap between topics and the volume of readings was manageable with the right amount of time dedicated.

However, now having started studying for part 2, in my honest opinion the changes seem a little extreme. The total number of readings is now at 101 (apologies if this is not entirely correct)... this is incredibly daunting, and having covered a few of the operational risk readings already, I have already noticed some overlap and it seems unnecessary. Operational risk now only counts for 20% of the exam, yet the number of readings has increased.

It's a shame because I felt that my knowledge of topics covered in part 1 really developed as I was able to spend sufficient time to fully understand the concepts. I am already finding in part 2 that I am having to skim over topics otherwise there is no way I will cover the syllabus. As @David Harper CFA FRM said above, everyone is in the same boat, but I also agree that the volume of material does not seem to align to the number of questions which makes preparation challenging.

 

[David Harper CFA FRM]

Thank you @Lmgroves1 I agree. I've shared a link to your comment with GARP (thank you for your permission) because I've been saying the exact same thing. I believe it serves neither candidates nor EPPs to be simultaneously overhauling and expanding the syllabus so rapidly. For one thing, P2 is grossly over-assigned: the testable set can only be a fraction of what is assigned, so that *everybody* is spending time on certain details that won't be tested, but we do not know which details.

It would be a different matter if we had more conceptual prospective clarity, I mean: if we all had a solid understanding of which items/concepts fall approximately into the "testable cone." But GARP's own Practice Exams cover an extremely thin slice of P2 (the single extant practice paper is a 4+ year recycle of a very small % of the P2 LOs: if that we're the guide, we could ignore >80% of P2 LOs!)

The priority should be on consistency, consolidation, mastery, relevance and prioritization (aka, pedagogy in service of candidates and their time) of the most relevant knowledge and skills. An example of an over-assignment is the new Chapter 6. Monitoring Liquidity [LTR–7]: we just finished draft + PQ set for this, so it's fresh for me. It contains fresh new formulas for various cash flow term structures, here is just a sample:

Do candidates really need to know? I really have no idea. I promise: All this year candidates will be asking us (and I imagine other EPPs) the question, "do i need to memorize these formulas"" Might this entire reading be replaced next year (in which case, it isn't important)? I can't say. The problem with such rapid churn (churn = addition, replacement and/or deletion) is that it is impossible for any person to maintain mastery of the syllabus, not GARP's own staff, not EPPs, not candidates. We're all just scrambling to keep up with a body of knowledge (BOK) that's a moving train that's moving too fast.

 

[saifhanif]

Hello BT Team,

I would like to take a look at sample study notes before purchasing a BT FRM package.

Could you please assist me with this?

Regards,
Saif

 

[Nicole Seaman]

Hello BT Team,

I would like to take a look at sample study notes before purchasing a BT FRM package.

Could you please assist me with this?

Regards,
Saif

Hello @saifhanif

We have samples available in our study planner. If you click through the different materials, you will see a "Download Sample" button. Here are some examples:

• https://learn.bionicturtle.com/topic/study-notes-bodie-chapter-10/
• https://learn.bionicturtle.com/topic/study-notes-diebold-chapters-5-7-8/
• https://learn.bionicturtle.com/topic/study-notes-hull-chapters-1-2-3-4-5-6-7-10-11-12-26/

There are many others that have samples, including the practice question sets and instructional videos, but those are just a few.

Nicole

 

[bijean.mansoorifard]

hello!
reading your spreadsheet, could you please confirm me that the 3th chapter (capital structure in banks) of Credit Risk (level 2) has been moved from level1 exam? is it exactly the same?
thank you

 

[Nicole Seaman]

hello!
reading your spreadsheet, could you please confirm me that the 3th chapter (capital structure in banks) of Credit Risk (level 2) has been moved from level1 exam? is it exactly the same?
thank you

Hello,

As listed on the spreadsheet, that chapter has not been removed from Part 1. It is being used in both Part 1 (T4) and P2 (T6). Here is the list of learning objectives for each Part under that chapter (blue LOs are new to 2020):

Part 1, Topic 4: Chapter 6. Credit Risk and Capital Modeling

• Evaluate a bank’s economic capital relative to its level of credit risk.
• Explain the distinctions between economic capital and regulatory capital, and describe how economic capital is derived.
• Identify and describe important factors used to calculate economic capital for credit risk: probability of default, exposure, and loss rate.
• Define and calculate expected loss (EL).
• Define and explain unexpected loss (UL).
• Estimate the mean and standard deviation of credit losses assuming a binomial distribution.
• Describe the Gaussian copula model and its application.
• Describe and apply the Vasicek model to estimate default rate and credit risk capital for a bank.
• Describe the CreditMetrics model and explain how it is applied in estimating economic capital.
• Describe and use the Euler’s theorem to determine the contribution of a loan to the overall risk of a portfolio.
• Explain why it is more difficult to calculate credit risk capital for derivatives than for loans.
• Describe challenges to quantifying credit risk.

Part 2, Topic 6: Gerhard Schroeck, Chapter 5. Capital Structure in Banks (all the same P1 LOs from 2019)

• Evaluate a bank’s economic capital relative to its level of credit risk
• Identify and describe important factors used to calculate economic capital for credit risk: probability of default, exposure, and loss rate.
• Define and calculate expected loss (EL).
• Define and calculate unexpected loss (UL).
• Estimate the variance of default probability assuming a binomial distribution.
• Calculate UL for a portfolio and the UL contribution of each asset.
• Describe how economic capital is derived.
• Explain how the credit loss distribution is modeled.
• Describe challenges to quantifying credit risk

I hope this answers your question. Both of the spreadsheets list the exact LOs for each Part, which LOs are new to 2020, and which ones are being used in both Part 1 and Part 2.

 

[surv]

Part 1, Topic 4: Chapter 6. Credit Risk and Capital Modeling

can u re-check the title of this chapter? because as per GARP books, it reads as Measuring Credit Risk

 

[David Harper CFA FRM]

HI @surv I see what you mean (the book chapter 6 is called "Measuring Credit Risk") however both the Learning Objectives and Study Guide ((at least in my versions) are calling this "Chapter 6: Credit Risk and Capital Modeling" @Nicole Seaman I just sent GARP an email to alert them of this discrepancy ...

 

[bijean.mansoorifard]

Hello!

Regarding the Operational section, in 2019 the chapter <15 Model Risk> (id 58.1) extract from the <The essential of Risk management> by Crouhy, Galai and Mark has been written in red BUT in 2019 there is the empty cell with the book reference.
Could you please confirm that the topic has been removed?

Thank you.

 

[Kanyarabi]

Hi David/Nicole,

I see chapter 15 in GARP's book - Correlations and Copulas has been merged with Volatility now in the study planner. It seems Copulas is now removed, I have 2019 GARP study material so just wanted to confirm if Copulas has now been removed this year.

Thanks

 

[Nicole Seaman]

Hi David/Nicole,

I see chapter 15 in GARP's book - Correlations and Copulas has been merged with Volatility now in the study planner. It seems Copulas is now removed, I have 2019 GARP study material so just wanted to confirm if Copulas has now been removed this year.

Thanks

Hello,

I've moved your post to our curriculum analysis XLS thread, which shows everything that has been added, removed, or changed in the syllabus. If something is not published in our study planner yet, it does not mean that it is not in the syllabus. We are following the 2020 syllabus as we publish new materials.

 

[sinovich]

hi , anyone noticed any differences between 2018 and 2020 material except the new treasury and liquidity section and the current market issues ?
tks

 

[Nicole Seaman]

Hello @sinovich

There have been many changes in the curriculum since 2018. You can view the changes here in our curriculum analysis XLS that we prepare every year: https://forum.bionicturtle.com/threads/2019-2020-curriculum-change-analysis-spreadsheets.22938/.

Thank you,

Nicole