FRM Part 2 Examination preparation tips

[ag0511]

This thread has been created to provide information and tips about FRM part 2 examination preparation to the present and future candidates .I seek participation and feedback from the registered candidates for Part 2 examination, successful candidates of part 2 examination from the past periods awaiting certification and Certified FRM's about areas such as how should one handle individual subjects from Part 2 Exams and individual topics within them.

• Market risk measurement & management
• Credit risk measurement & management
• Operational & Integrated risk management
• Risk management and Investment Management
• Current Issues

Participants based upon their knowledge and experience in past or present can share the following feedback about chapter(s) or topic and/or subject(s) :-Classification -Theory based or Numerical oriented ,Difficulty level,testable or key concepts,Whether the chapters are stand-alone topics (independent reading) or have to be covered together,information about prior concepts related to P1 or other topics related to P2 mentioned in topic's study material, if applicable and mathematical concepts, which are required to read and/or comfortably handle any given chapter, suggested order of coverage etc. The participants can use their discretion and judgement to cover any other area of exam preparation in their feedback.

This thread aims to complement the information and ongoing discussion in the "Study Plan Guide"in FAQ section by providing specific inputs. Additionally,it will also have some tips related to exam day from the people who have written part 2 exams or part 1 exams previously.

 

[ag0511]

Prediction about likely cutoff for P2 and quartile distributions

At this juncture,it is settled that who all will appear for Nov 18 part 2 exams.

People may be taking stock of their situation and may also be concerned about failure or getting poor passing quartile scores.Have done some analysis on these parameters,which should benefit each present and future exam takers having confusion and anxiety to do some self analysis.

These are key predictions (before the time of posting this) for FRM Nov 18 part 2 exams.This should hold true if the difficulty level does not change much from the past in either direction.

Aggregate passing score - Min 45,indeterminate range - 46 -52.Clear Pass -55 & Above.

Topic wise likely Quartiles

Has to be read as (see details in bracket)

Q1( More than equal to),Q2 (Between this range),Q3(Less than and between this range),Q4 (Below)

MKT - 17,15-16,15-12,12

Credit - 16,13-15,13-10,10

Ops - 14,12-13,12-11,11

Inv - 12,10-11,10-7,7

CI - 7,5-6,5-4,4

Both the heads (aggregate passing score and likely subject wise Quartile) are fully consistent.I have incorporated and considered various parameters to arrive at this.

Disclaimer - The reader should use their discretion in using it.This is an independent analysis of a registered candidate and should not be seen as an endorsement or attempt to influence or have bearing on exam results by any institution or private body related to GARP.Objective behind this is to help candidates towards exam preparation.The writer would be more than happy to be proven wrong,and if the same helps in raising the standards of FRM part 2 exams leading to growth and advancement of risk profession.

 

[ag0511]

*Chapter feedback*

*Topic - 79,The Gordon Gekko effect : The role of culture in the financial industry* (CI topic)

*Alternate prep provider's text and EOC questions,did not refer Original case*

*LO wise coverage (Important concepts,terms) and general feedback*


*79.1*

Fictional character Gordon Gekko and Gekko effect,definition of culture, *how it is spread through 3 different factors, Role of leadership in spreading certain culture, Social science researches -Milgram and Zimbardo on finding reasons other than financial incentives that influences behavior* - Lessons and reasons for this, *role of group composition*,Role of culture and environment

*LO 79.2*

*Edgework*,influence of Edgework on firm's culture,risk management in insurance v/s bank, *Role of incentives and peer behaviour in deciding culture*

*LO 79.3*
*Adaptive market hypothesis (AMH)*,context and behaviour,influence of different economic times, *affinity link,environment on culture*

*Corporate examples of culture having an impact on business failures - LTCM, AIG,Lehman brothers,Soc Gen - individual cases and reasons that contributed to failure* - *Very important and testable*,Regulatory culture and its failings

*This LO is important as it is directly related to the scope of FRM studies*

*LO 79.4*

Example of NSTB, *Madoff story and example*,
*Zimbardo studies, conclusion and suggestions to reduce the effect of destructive culture*,AMH framework, *LO studies and SIMON*, Idea of Manager behaviour and risk appetite as dependent variable in regression, *Example of DNB*,Regulatory role, *Regulatory capture*,Ways to influence behaviour and culture ,CRO and top management - authority, protection and accountability ...

*Feedback*

All GARP LOS seem to be well covered and explanations directly address this.However given the broad scope of this topic,it will be prudent to scan the original readings.Atleast one or even two question from this topic can be expected.The prep provider suggests that concepts can be tested in a real life case.

 

[ag0511]

Sharing subject wise assessment of all chapters as per GARP order and likelihood of them being tested in exam.

This information in no way is meant to directly or indirectly violate the spirit and desired conduct for registered exam candidate.It should not be seen as a substitution for in depth learning and studies required for desired and expected exam performance or standard that a registered candidate is required to meet towards passing the exam.All readers should apply their discretion in using this information.And it should be ignored by all candidates who have undertaken long study hours to master the entire curriculum.Writer would be satisfied,if proven wrong.As it will affirm that there is no substitute for comprehensive and in depth learning,which is expected from every successful candidate.

 

[ag0511]

*Subject Feedback - Market risk*

Like RMIM and CI,no chapter can be overlooked.These are the imp ones ...

*Ch 1,3,4,6,10,11,13,14*

One Mark question can be expected from all others ..
*2,5,7,8,9,12,15*

 

[ag0511]

*Important - Subject feedback - Credit risk*

Imp ones - Ch 19-23, 27,29,30,34,35.These 10 chapters should have atleast around 65-70 % or more weight in exam ...

Other chapters - One Mark question likely from following

1.16 and/or 17 - but not both separately

2.Ch 18

3.Ch 24,25,26 and Ch 28 -
All of them put together can be tested for multiple choices within question or individually for upto 2 marks.Choice between CI case and Ch 28 can be made for revision.

4.Ch 31

5.Ch 36

People should use their discretion.Ideally it should be looked for inclusions and exclusions,beyond those for which one agrees or has already figured and listed those chapters as important.

 

[ag0511]

*Subject feedback - RMIM,book 4*

Like CI and Market risk,almost all are significant from examination's perspective, *these are imp ones*

1. *Ch 62,67,68,70 -72*

Additionally atleast one ques each can be expected from following

*Ch 63,64*

 

[ag0511]

*Important - Topic CI readings feedback*

For CI,though one question should ideally appear from each readings ...but here are the imp ones

1.Big data - 2 ques likely
2.Machine learning
3.Credit loss provisioning

These 3 are technical and may be difficult for many ...

4.Fintech - Easy but 2 ques likely
5.Gordon Gekko - 2 ques likely due to length and testable concepts ...

 

[ag0511]

*Some body and brain conditioning suggestions from now until exam*

Conduct of FRM part 2 examination in the afternoon could be a challenge and a reason for less than satisfactory performance in exam.Reasons - Sleep deprivation,intake of food which can't be avoided till afternoon etc.Some suggestions ...

1.One should avoid studying late at night from now on and try to fulfill their maximum sleep requirement during the nights.Can supplement the shortfall by taking a small nap during early morning or time until 10 am.Sleep can be also be induced by taking a significant dosage of food,which is unhealthy otherwise.These practice should be followed for few days,so that body gets accustomed to remain awake and brain is attentive during the exam slot.Practice question or mock test should be preferably done during the actual exam timings to condition brain ...

2.Food items - Certain food items should be avoided before the exam and others like caffeine or other acceptable stimulant should be consumed,if one takes them in regular course just one or two hour before exam.One can take heavy and healthy breakfast,to ensure that stomach is not empty, till say around 8 am,followed by quick 1-2 hour sleep,if there is a shortfall in sleep requirements ...

 

[sher1234]

Thank you, very helpful!

 

[Jeremiah Stafford]

What do these "CH" numbers refer to?

 

[ag0511]

What do these "CH" numbers refer to?

Chapter nos as per GARP readings ... Market risk has 15 chaps,credit risk has 21,ops risk has 25 etc .. No of first chapter of credit risk is 16 and that of ops risk is 37... Investments from 62 and CI from 73 upto 79 ...

 

[ag0511]

Prediction about likely cutoff for P2 and quartile distributions

At this juncture,it is settled that who all will appear for Nov 18 part 2 exams.

People may be taking stock of their situation and may also be concerned about failure or getting poor passing quartile scores.Have done some analysis on these parameters,which should benefit each present and future exam takers having confusion and anxiety to do some self analysis.

These are key predictions (before the time of posting this) for FRM Nov 18 part 2 exams.This should hold true if the difficulty level does not change much from the past in either direction.

Aggregate passing score - Min 45,indeterminate range - 46 -52.Clear Pass -55 & Above.

Topic wise likely Quartiles

Has to be read as (see details in bracket)

Q1( More than equal to),Q2 (Between this range),Q3(Less than and between this range),Q4 (Below)

MKT - 17,15-16,15-12,12

Credit - 16,13-15,13-10,10

Ops - 14,12-13,12-11,11

Inv - 12,10-11,10-7,7

CI - 7,5-6,5-4,4

Both the heads (aggregate passing score and likely subject wise Quartile) are fully consistent.I have incorporated and considered various parameters to arrive at this.

Disclaimer - The reader should use their discretion in using it.This is an independent analysis of a registered candidate and should not be seen as an endorsement or attempt to influence or have bearing on exam results by any institution or private body related to GARP.Objective behind this is to help candidates towards exam preparation.The writer would be more than happy to be proven wrong,and if the same helps in raising the standards of FRM part 2 exams leading to growth and advancement of risk profession.

Clear pass score is arrived after summation of top 2nd quartile scores of every subject ..

Failed score is summation of lower band of 3rd quartile scores ...

Indeterminate range is combination of 1's,2's,3's and 4's in different subject.The GARP exam committee and other authorities has the discretion to arrive at minimum absolute score required to pass the exams ...

 

[Jeremiah Stafford]

Thank you

 

[ag0511]

Starting point for FRM part 2 preparation for 2019

Obviously,the people who have appeared in 2018 exams can start with market risk or credit risk or even RMIM with 2018 books.

However this is the time,one can read the original Current issue topics for 2019,irrespective of their length and difficulty or technical nature.Normally and mostly, CI topics are interesting, practical and real world based topics,which should generally help any person in understanding the current and future trends in Risk management.

 

[David Harper CFA FRM]

Thank you @ag0511 for a great tip and I agree that you can start Part 2 study with Current Issues. I just wanted to note, in case new candidates don't know this: historically, GARP has each year changed all of the Current Issue readings. They've done this every year. Therefore, 2019 candidates probably want to wait to see the new syllabus, which actually could be released by GARP any day now ...

 

[Yairw]

Thank you @ag0511 for a great tip and I agree that you can start Part 2 study with Current Issues. I just wanted to note, in case new candidates don't know this: historically, GARP has each year changed all of the Current Issue readings. They've done this every year. Therefore, 2019 candidates probably want to wait to see the new syllabus, which actually could be released by GARP any day now ...

GARP didn't change all the readings in the new syllabus, for the first time from what I understand.

 

[Nicole Seaman]

GARP didn't change all the readings in the new syllabus, for the first time from what I understand.

Hello @Yairw

Nobody has the final 2019 FRM curriculum to anyone yet, so we have no way of knowing how much they have changed. However, in past years, they have always changed all of the Current Issues readings even if they do not change much throughout the rest of the syllabus. Once GARP releases the final 2019 curriculum, I will be posting a curriculum analysis XLS to help our members compare the syllabus from last year.

Nicole

 

[Yairw]

Hello @Yairw

Nobody has the final 2019 FRM curriculum to anyone yet, so we have no way of knowing how much they have changed. However, in past years, they have always changed all of the Current Issues readings even if they do not change much throughout the rest of the syllabus. Once GARP releases the final 2019 curriculum, I will be posting a curriculum analysis XLS to help our members compare the syllabus from last year.

Nicole

Here is what GARP published during the weekend including Study Guide Changes . I wrote before based on that.

https://www.garp.org/#!/frm/study-materials

 

[Nicole Seaman]

Here is what GARP published during the weekend including Study Guide Changes . I wrote before based on that.

https://www.garp.org/#!/frm/study-materials

Hello @Yairw

Thank you! I was definitely mistaken in my last post then. We generally receive an email from GARP as a prep provider when the final curriculum is released, and I did not receive an email this time. When I had last checked the website it still showed the 2018 curriculum. I appreciate you pointing out that the new curriculum is now on the GARP website.

Nicole