FRM Handbook for 2008

[narayananvenkat]

Hi David..

FRM handbook is a part of the main reading material for the exam as you know. for 2008, is the handbook 4th edition published last year continues or do you think GARP will bring ye another edition? Also you had mentioned earlier you will suggest the crticial readings we need to buy out of the core readings. could we have that. getting books in India is a terrble exercise for one has to hunt.
Thanks
venkat

 

[David Harper CFA FRM]

Hi venkat,

It's a great question. And, frankly, a weakness of the FRM is disjointed sources (e.g., single chapters from expensive books) plus the unclear role of the FRM handbook.

I've gotten lots of email frustration on this topic. Please bear in mind: it's sort of early in the season. GARP will (soon) round out the course reading pack (and, IMO, they will need to reissue the AIMs as I see problems with the current AIMs).

About the 4th Edition, no, it will not be updated for 2008 (it was updated last year 2007, so it will be at least another year for an update).

The rest is just my opinion, not GARP endorsed (just to be clear) because I unable to discern an official statement vis a vis the handbook:

* The course readings are more important the the handbook
* Yes, I will get you that list (my prioritization ASAP - over the weekend likely, along with some study plans)
* The handbook is optional. I think this is a personal choice: of course the handbook is great, Jorion seriously is one of the best authors on the list. His handbook can only help, if you have the time and $ (more the time, right?)
* But the handbook is an imperfect solution for the test b/c: it does not correspond 1:1 with the exam. So, you have to look at it as "more help" - many of the new readings are simply and naturally not addressed (e.g., subprime, that is but one example). and conversely, some other material that is in handbook will NOT be tested (e.g., most/all of the accounting). The questions are good help, of course, but it's hit/miss on whether they will apply to testable concepts. If you had the time to peruse this forum, you'd find several examples, from last year 2007, of questions posted from the handbook (and the attached CD ROM) that did not apply to the test or were otherwise not exactly helpful (f/back i've shared with GARP). Yes, I am quite sure that is a fair statement!
* And sorry to belabor (but this is about how you spend your precious time, so...): for example, for the probability/statistics, (aside from my movies/notes/etc), you are definitely advised to focus on the assigned Gujarati over the handbook (i mean, if it's one or the other) because that's the exam material and there are, for example, terminology differences (more to the point, Jorion doesn't really cover chi-square and F distributions). I believe this about other parts to: e.g., it makes no sense to skip Hull in favor of anything else, including the handbook, on the assigned derivatives topics. Read Hull. Then, if you like, the handbook is a great next step (in addition to my notes).
* My bottom line is that the handbook is a great addition, but not necessary. In fact, for people who want to start early, I personally believe a better choice is Jorion's VaR book, 3rd Edition.
* It is good to buy everything if you make the time to follow-thru on reviewing it. It does not help to purchase extra materials if they aren't read. My distinct sense is that candidates tend to feel like they've run out of time later in the year, so that's why i say the handbook is optional; time is scarce

Hope that helps! David

 

[ploy_j]

Hi David,

As you said some of the questions from the handbook/CD are not very useful, do you think it's a good idea to by GARP CD still? Is it worthwhile to go through questions in FRM handbook?

Thanks and Regards,

 

[narayananvenkat]

Hi David..

Thanks for your quick reply. Honestly your reply really cautions me over too much reading rather than concentrate on a particular plan for the subject dealt with and enormous materials seem to be available.. As regards questions supplied by GARP, I feel they will definitely give one a good start to face exam with a good mindset.

Just one more question. The GARP digital library has also given free download stuff covering about three areas like Rsik measurement, credit risk, BASEL et., Having just started, even a glance browsing/flipping through pages (running to 50-60 sometimes) is mind blowing. As a matter of fact your blog chart talks appearing every day is much more lucid and better understandable. My request is may be at the time when your screencast covers those relevant areas you may supplement us with these readings so that we save time, and most importantly we get a grip over what is stated there. I am not at the same time suggesting we the members skip these readings!!!

REgards

venkat

 

[David Harper CFA FRM]

FRM_wannabe,

The safe answer is: yes, it is good to buy the CD-ROM because more is better. But that assumes unlimited time. In my experience, few candidates get to November having consumed everything; they run out of time. Under a scenario where you have limited time to prepare, the CD-ROM questions would not be a high priority for me. Put better, they would be the questions I'd do after I've worked everything else. So, if I get to them, great, but I won't plan on it. (again, just based on our working several of the CD-ROM questions here in the forum, last year, and many were not relevant).

Regarding the handbook questions, I do think many of those are good; when they apply to the 2008 AIM, yes, I think the handbook questions tend to be good. But, as I've suggested above, if the topic is say "Probability," IMO, you are better off working some of Gujariti's questions first. It's not about quality, it's about relevance: the handbook won't have question about chi-square or F distribution (new), won't have the PMF/PDF terms, Wilmott's bootstrap, and on and on on. In fact, as i look at the new probability AIMs, many of them will not be found in the handbook. But it varies, fixed income (because Tuckman remains and the AIMs are somewhat static here) AIMs would be relevant. If you do get the handbook, my upcoming EditGrid schedule etc also will itemize the year-over-year cirriculum differences, so you can use that to locate the relevant parts.

I hope that helps, you can see why i have difficulty answering b/c on the one hand, more is better, on the other hand, time is not infinite.



Hi venkat,

"...cautious me over too much reading rather than concentrate on a particular plan for the subject dealt with and enormous materials seem to be available"

This is absolutely my view, as you've stated it. Simply because the source reading material list is massive; it is enough to do. Better to read the new subprime securitization article THREE times than read non-testable material....

"My request is may be at the time when your screencast covers those relevant areas you may supplement us with these readings so that we save time"

Where they are already freely provided, I will try and do as you ask. Where I do not have copyright permission, I cannot, so I will have to do that on a case by case. My Study Notes are not ready yet, but after the notes are ready, I will try to insert as possible. I will do my best in this regard, with links, etc. Thanks for a good idea. I'm glad the blog is useful, truly, sometimes I am not sure if it is read too much (but no matter, I really do it to practice/prepare the product materials).

Thanks! David

 

[yuqingmi]

Hi David,

This is the greatest FRM forum i have ever visited and thank you for all the valuable information. Unfortunately i have already bought the FRM Handbook. Appreciate it if you could advise me on the relevant chapters to focus on rather than budgeting time to study the entire book.

Thanks!

 

[ploy_j]

If you go to the sticky thread (Bionic Turtle: updated publish schedule, possible study calendar, and FRM Handbook) and click on the heading called "About FRM handbook" - you will be directed to a spreadsheet that tells you which chapters are more/less or not relevant.

Hope this helps :lol:

 

[yuqingmi]

Hi FRM_wannabe,

Thank you for the information. I didn't realise that i could click at the link!

Many many thanks!

 

[ploy_j]

My pleasure ;-)

 

[msgmscpa]

Hi All,

I have FRM Handbook 2nd Edition softcopy. Is it fine or I need to refer 4th edition....Request you to pass on if anybody having 4th edition softcopy. Thanks in Advance.

 

[msgmscpa]

Dear David,

Hi...I am just starting up FRM preparation and not very clear about which material to refer. Please help me out for the same.

You mentioned Course readings is more relevant than handbook. Please let me know which all reading material should be referred. I have Hull - 6th Edition and planning to buy Schwezer notes. Please suggest.

 

[David Harper CFA FRM]

Hi Ajnabi,

Some of the reference are to the paid member section. But, please welcome, I would love to see the forum develop into a great all purpose resource!

I do owe the forum community a list of the core readings where I will tag the most critical versus less critical. Sorry just don't have that yet...

FYI, in the latest Garp risk review, they reported that, when they asked 2007 FRM test takers, "what would you do differently?"

- 57% said they would have relied more on core readings
- 47% said they would have relied more on their handbook

(for what it is worth. BTW, my opinion is that the single biggest regret is simply "I wish i had allocated more time; i.e., not underestimated the exam")

In my opinion, the core readings are significantly more important than the handbook (I have gone so far as to suggest the handbook is optional if you otherwise have good resources). In regard to the 2nd Edition, I would not rely on this. The exam is updated every year; too much of that will be less relevant or irrelevant to the exam. The preparation investment is too much time and money to default to outdated resources, IMO.

David